Sep 062014

A customer carries out her purchases from a Family Dollar store in Jackson, Mississippi.  AP                                                                                         

CHESAPEAKE (AP) – Family Dollar is rejecting Dollar General’s latest acquisition offer, and Dollar Tree says it will now divest as many stores as needed to get antitrust clearance for its deal to buy Family Dollar.

Family Dollar rejected an earlier offer of nearly $9 billion from Dollar General, with the Goodlettsville, Tennessee, discounter then boosting its bid to $9.1 billion. Dollar General – the nation’s biggest dollar-store chain – had also revised its proposal to increase the number of stores it would be willing to divest and to include a $500 million reverse break-up fee to Family Dollar if the deal hit antitrust roadblocks.

But Family Dollar said Friday that it still has antitrust concerns. Dollar General said in a statement that it is still committed to acquiring Family Dollar and is evaluating its next steps.

Family Dollar has been looking for a lifeline after running into some financial stress, shuttering stores and cutting prices. In June one big shareholder, Carl Icahn, urged the Matthews, North Carolina-based company to put itself up for sale.

A month later Family Dollar Stores Inc. accepted an $8.5 billion deal with Chesapeake, Virginia-based Dollar Tree Inc. The transaction includes $59.60 in cash and the equivalent of $14.90 in shares of Dollar Tree for each share held. The companies valued the transaction at $74.50 per share at the time. Including debt and other costs, Family Dollar and Dollar Tree estimated the deal to be worth approximately $9.2 billion.

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