Dollar Tree, Family Dollar Get Second Request From FTC

(RTTNews) - Discount retailers Dollar Tree, Inc. (DLTR) and Family Dollar Stores, Inc. (FDO) said Tuesday that they have each received a request for additional information, or second request, from the Federal Trade Commission or FTC in connection with Dollar Tree's pending acquisition of Family Dollar.

The second request was issued under notification requirements of the Hart-Scott-Rodino Antitrust Improvement or HSR Act of 1976, as amended.

The companies noted that the second request will extend the waiting period imposed by the HSR Act until 30 days after Dollar Tree and Family Dollar have substantially complied with the request.

Dollar Tree and Family Dollar said they will cooperate fully with the FTC and expressed confidence that regulatory approval for the deal will be obtained. The companies expect to close the transaction as early as the end of November 2014.

Another discount-store operator Dollar General Corp. (DG) said last Friday that it remains committed to acquiring Family Dollar and was currently evaluating its next steps.

The statement from Dollar General came in response to the decision by Family Dollar's board of directors to reject Dollar General's sweetened all-cash proposal to acquire all the outstanding shares of Family Dollar for $80.00 per share.

At that time, Family Dollar reaffirmed its recommendation in support of the deal with Dollar Tree that is expected to close as early as the end of November. Family Dollar and Dollar Tree also revealed that they expect the FTC to issue a "second request" for additional information on Monday and that they are confident regulatory approval will be obtained.

Dollar Tree agreed in late July to acquire Matthews, North Carolina-based Family Dollar Stores for $74.50 per share in a cash and stock deal valued at $9.2 billion. On August 18, Dollar General made a superior all-cash proposal of $78.50 per share or $9.7 billion to thwart the Dollar Tree bid.

On August 21, Family Dollar said its board unanimously rejected the non-binding proposal made by Dollar General on the basis of antitrust regulatory considerations. Family Dollar's board unanimously reaffirmed its recommendation in support of the merger agreement with Dollar Tree.

Last Tuesday, Dollar General sweetened its offer by $1.50 to $80.00 per share, and also raised the number of stores it was willing to divest if ordered by the FTC. Showing evidence of its confidence in its ability to obtain antitrust approval, it also agreed to pay a $500 million reverse break-up fee to Family Dollar relating to antitrust matters.

The combination of Family Dollar and Dollar General would have created an entity of more than 20,000 stores with presence in 46 states. Meanwhile, the combined Dollar Tree-Family Dollar entity will have more than 13,000 stores in 48 states and five Canadian Provinces, generating in excess of $18 billion in annual revenues.

DLTR is trading at $55.36, down $0.18 or 0.32 percent on a volume of 177,940 shares. FDO is trading at $78.67, down $0.15 or 0.19 percent on a volume of 133,299 shares.