Dollar General, Family Dollar and Dollar Tree store have spent the last two weeks engaged in a volatile love triangle. Dollar Tree loves Family Dollar; Family Dollar loves Dollar Tree ; Dollar General will have Family Dollar no matter whether she loves him or not.
The intrigue began when dollar store operator, Dollar Tree, offered $8.5 billion in cash and stock to acquire Family Dollar, a low price point variety store operator. Family Dollar’s board quickly accepted the offer and then Dollar General attempted to disrupt the wedding by offering $9 billion; a bigger dowry than that offered by Dollar Tree.
It appears that Family Dollar prefers to join with Dollar Tree as it has rejected the Dollar General offer. The reason given is that it will not pass muster with existing anti-trust laws. I am not so sure that that is the real reason.
I explain my thinking in my next posting.