By Michael Calia
Dollar Tree Inc. and Family Dollar Stores Inc. said Monday that
the Federal Trade Commission's most recent analysis is favorable to
their $8.5 billion deal, potentially dealing a blow to a rival
proposal from Dollar General Corp.
Dollar Tree said Monday that it expects to reach a deal by the
end of this month with the Federal Trade Commission over how many
stores it must divest to complete its $8.5 billion acquisition of
Family Dollar Stores Inc. The discount retailer said it believes it
will need to divest fewer than 300 stores after the FTC provided it
with a list of about 300 stores that apparently raise antitrust
concerns.
Family Dollar, meanwhile, said in a letter to shareholders
Monday that the count of "presumptively problematic stores" is 310,
based on the regulator's most recent analysis. Dollar Tree and
Family Dollar both said they expect several stores to be removed
from the FTC's list.
Family Dollar Chief Executive Howard Levine said in the letter
that the FTC's analysis "reaffirms the statements that we have been
making for several months now about the inability of the Dollar
General proposal to be consummated on the terms proposed by Dollar
General and the certainty of the Dollar Tree merger."
Dollar General didn't immediately respond to a request for
comment.
Dollar Tree added that it has identified potential buyers for
stores that would have to be divested and that it expects to
present a list to the FTC for approval within a month.
Family Dollar said it estimates that, based on the FTC's
analysis, there could be as many as 3,500 to 4,000 presumptively
problematic stores in Dollar General's unsolicited, $9.1 billion
proposal.
The updates from Dollar Tree and Family Dollar come after Family
Dollar shareholders pushed back a vote on the deal for a second
time to give Dollar General time to try to convince Family Dollar
to accept its all-cash offer. On Monday, Family Dollar urged
shareholders to vote for the Dollar Tree deal at the Jan. 22
special meeting, warning that Dollar Tree isn't willing to agree to
further adjournments.
Dollar General made an unsolicited bid over the summer after
Family Dollar and Dollar Tree announced their agreement. Family
Dollar has resisted Dollar General's offers because of regulatory
concerns over the amount of stores it would have to close to meet
antitrust requirements. The FTC has been reviewing both potential
transactions.
Write to Michael Calia at michael.calia@wsj.com
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