News

Dollar Tree to buy Family Dollar for $8.5 billion

Dollar Tree to buy Family Dollar for $8.5 billion

Customers walk past a Family Dollar store at Hickory Grove Market in Charlotte, N.C. Photo: Associated Press/Ross Taylor, File

(Reuters) – Discount store chain Dollar Tree Inc offered to buy rival Family Dollar Stores Inc for about $8.5 billion, in a deal the companies said would create North America’s leading discount retailer.

Dollar Tree’s offer of $74.50 per share in cash and stock represents a premium of about 23 percent over Family Dollar’s close of $60.66 on Friday. Family Dollar had about 114 million shares outstanding as of July 5.

Shares of Family Dollar, which has been under pressure from activist investor Carl Icahn to sell itself, rose about 21 percent to $74.00 in premarket trading on Monday.

Dollar Tree shares were up 4.2 percent at $56.50.

Family Dollar shareholders will get $59.60 in cash and $14.90 in stock for each share they hold.

Family Dollar caters to lower-income shoppers, many living paycheck to paycheck, while Dollar Tree mostly targets the middle class.

Icahn, Family Dollar’s largest shareholder with a 9.4 percent stake, wanted the company to sell itself to Dollar General Corp to help it cope with stiff competition from big-box retailers such as Wal-Mart Stores Inc .

J.P. Morgan Securities LLC is financial adviser to Dollar Tree, and Morgan Stanley & Co. LLC is financial adviser to Family Dollar.

(Reporting by Ramkumar Iyer and Devika Krishna Kumar in Bangalore; Editing by Savio D’Souza)

Recent Headlines

7 hours ago in Local

Man Arrested For Selling Westfield Teen Fatal Heroin Dose

police lights

Police say Seth Lombard-Hawthorne sold Lillian Anderson the "American Gangster" heroin that ended up killing her this past weekend

7 hours ago in Local

Judge Denies Belchertown Man Bail In Assault Case

gavel

An autistic Belchertown man is denied bail as he awaits trial on charges of trying to kill his mother

8 hours ago in Local

Granby Approves School Renovation

vote up or down

Town meeting voters approve $32-million dollars to overhaul and double the size of East Meadow Elementary School

8 hours ago in Local

Hadley Police Search for Alcohol Thief

Hadley police perp

Police have posted a surveillance photo of a woman they say stole $550 worth of booze from the Liquors 44 store

8 hours ago in Local

Quabbin Rattlesnake Island Plan To Be Unveiled

rattlesnake

The February 23rd meeting at Mahar Regional School will spell out the rationale for stocking Mount Zion Island with endangered timber rattlesnakes