Dollar General Expected to Make Hostile Bid for Family Dollar

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By DAVID GELLES

Dollar General is preparing to go hostile with its $9.1 billion offer for Family Dollar, according to a person briefed on the matter.

The move, expected to be announced as early as Wednesday, would further complicate Family Dollar’s agreed deal to sell itself to Dollar Tree for $8.5 billion.

Already, Dollar General has made an offer to acquire Family Dollar for $80 per share, or $9.1 billion. Family Dollar rejected that offer last week, claiming the deal it agreed to with Dollar Tree had a better chance of passing muster with antitrust regulators.

But a hostile offer is likely to, at the very least, delay any deal between Family Dollar and Dollar Tree. And if Family Dollar shareholders disagree with their board, it could result in a Dollar General victory.

Dollar General was caught off guard when Family Dollar, a company it had long sought to acquire, agreed to sell itself to Dollar Tree this summer. Complaining that it was not given a fair chance to bid, Dollar General suggested that the decision not to engage in talks was motivated in part by the Family Dollar chief executive’s concerns about his job.

But the board of Family Dollar, which includes Edward Garden, the chief investment officer of the hedge fund Trian Fund Management, has made it clear which deal it prefers. (Mr. Garden’s endorsement of the deal with Dollar Tree is notable because Trian is one of the biggest Family Dollar shareholders, and is looking to sell its shares at the highest possible price.)

Last week, Family Dollar and Dollar Tree went so far as to include a “hell or high water” clause, pledging to do whatever is necessary to clear the deal with regulators.

Dollar General has said it would sell up to 1,500 stores to win antitrust approval, but has not yet offered to include a “hell or high water” clause.

Further details of the hostile bid were expected as early as Wednesday. Reuters earlier reported that Dollar General was preparing to go hostile.

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