Dive Brief:
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Family Dollar Thursday turned down rival Dollar General’s $9 billion bid, saying it didn’t believe such a move would pass muster with antitrust regulators.
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Charlotte, NC-based Family Dollar also dismissed Dollar General’s accusation that the move stemmed from Family Dollar CEO Howard Levine’s desire to retain his job, not from the stated antitrust concerns.
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A takeover of Family Dollar is widely seen as a result of pressure from activist investor Carl Icahn, but regulatory filings show that merger talks were underway before Icahn made his moves.
Dive Insight:
The dollar-store drama now underway has Family Dollar in a bit of a corner. Because Dollar General’s bid is higher than Dollar Tree’s, shareholders may put aside antitrust worries and prefer that. But Family Dollar has good reason to believe that Dollar General isn’t committed to addressing antitrust issues that could come up.
The news comes as Dollar Tree announced its earnings for the most recent quarter, with increased sales at $2.03 billion and gross profit rising 7% to $641.1 million, compared to the same quarter last year.