Dollar General sticks to store divestment count for deal
Reuters
Published Jan 15, 2015 09:38AM ET
Dollar General sticks to store divestment count for deal
(Reuters) - Dollar General Corp stuck to its estimate of divesting 1,500 stores to win approval for its bid to buy Family Dollar Corp and said it had held discussions with potential buyers.
Dollar General also said the Federal Trade Commission's method to predict potential price increases due to a combination of the company with Family Dollar was controversial and untested.
"The model is highly sensitive to adjustments in its assumptions and specifications," Dollar General said, noting that the FTC used a new approach to evaluate the deal.
Family Dollar said on Monday that regulators would want many more than 1,500 stores divested by Dollar General and estimated the figure to be around 3,500-4,000. It also asked shareholders to vote for its agreement to be bought by Dollar Tree Inc.
Dollar General's shares were down 1 percent at $67.05 in early trading, while Dollar Tree was up 0.4 percent at $67.69. Family Dollar was down nearly 1 percent at $75.62.
Dollar General said on Thursday it was working to gain "substantial compliance" with the FTC's request for further information by Feb. 10.
The FTC will have 30 days from the date Dollar General certifies compliance to either approve or block the deal, the company said.
"Although Dollar General believes that this matter is one that should be amenable to resolution by consent agreement with the FTC, it is prepared to defend litigation if necessary," the company said.
Dollar General took its $9.1 billion cash offer directly to Family Dollar shareholders in September after Family Dollar's board rejected the offer, citing antitrust concerns.
Influential proxy advisory firms ISS and Glass Lewis changed their stance on Wednesday and advised Family Dollar shareholders to vote for Dollar Tree's smaller $8.5 billion cash-and-stock offer, saying it offered more certainty of closure.
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Written By: Reuters
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