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)

Local Headlines

in Local

Building Iowa’s Future Event Held in Spencer

build

A sizable portion of the Iowa GOP statewide ticket was on hand in Spencer on Friday...

in Local

Storm Lake Counterfeit Conviction

courtnews1240

Yoirland Rojas has been convicted of making and using counterfeit credit cards...

in Local

Echo Plus Merging With Hope Haven

hopehaven

Echo Plus of Spirit Lake and Estherville is merging into the Hope Haven organization...

in Local

Clay County Joins First Impressions Program

claytourism

Western Iowa Tourism conducts the 'secret shopper' style program...

in Local

Iowa Tourism Awards

kuhlmanaward

The Iowa Great Lakes Chamber of Commerce won a pair of awards...