Dollar General Corp. raised its offer for smaller rival Family Dollar Stores Inc. after an initial proposal was rejected in favor of a lower bid on antitrust concerns.
Dollar General offered to pay $80 a share in cash, it said today in a statement, compared with an initial $78.50 bid. The retailer also said it's prepared to sell as many as 1,500 stores if ordered to do so by the Federal Trade Commission and has agreed to pay a $500 million reverse break-up fee to Family Dollar if the bid is not completed due to antitrust matters.
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Dollar General is trying to keep its perch atop the dollar- store industry after Family Dollar's board spurned its offer last week and reaffirmed its support of a deal with Dollar Tree Inc. A merger between Dollar General's two peers would create a new market leader, intensifying competition while Wal-Mart Stores Inc. is pushing smaller-format stores.
Family Dollar shares closed at $79.83 on Aug. 29, the last day that markets were open for business.
To contact the reporter on this story: Paul Jarvis in London at pjarvisbloomberg.net To contact the editors responsible for this story: Celeste Perri at cperribloomberg.net Robert Valpuesta