Dollar General (DG) has increased its bid for Family Dollar Stores (FDO) to $9.1 billion.
Dollar General’s previous offer of $8.95 billion to Family Dollar was rejected. Instead Family Dollar has chosen an $8.5 billion cash-and-stock offer from Dollar Tree (DLTR). However, the company said it will review the new offer by Dollar General, but that it’s sticking with Dollar Tree, reports Reuters.
Dollar General said that it may go hostile if its newest bid isn’t accepted. The company said it will go straight to shareholders if need be. It has also offered to cover a $500 million break up fee that was the reason Family Dollar gave for the first rejection, Reuters notes.
“We are confident that our enhanced proposal sufficiently addresses any concerns that led Family Dollar’s board of directors to reject our prior proposal without any discussions between our companies,” Rick Dreiling, CEO and Chairman of Dollar General, told The New York Times.
Family Dollar may be going with the Dollar Tree offer to protect its management. If the Dollar Tree bid is accepted, Family Dollar CEO Howard Levine will remain CEO of the subsidiary, but he would likely lose this position if the company is bought by Dollar General, Reuters reports.
DG and FDO shares were up slightly as of Tuesday afternoon.
DLTR shares were up 1% as of Tuesday afternoon.
