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

in Local

Easthampton To Consider Big-Ticket Items

Fresh
Easthampton

Community Preservation Act spending in the amount of 415-thousand will be before the Easthampton City Council tonight.

in National

The latest developments on ‘religious-objection’ laws

Updated
arkansasreligiousobjections

Indiana's new religious-objections law has sparked fears that it could allow discrimination.

in National

Home prices rise modestly, affordability still an obstacle

housingmarket

Few Americans have listed their homes for sale, with the tight inventory keeping prices higher.

in National

10 FOR TODAY: Wednesday, April 1

germanwings

Your daily look at the stories that will be talked about today.

in National

Brew more beer!

growler

Legislatures around the country are passing laws to allow microbreweries with restaurants to increase production of craft beer.