Some Dollar Tree Inc investors are crossing their fingers the company doesn't succeed in its $8.5 billion takeover of Family Dollar Stores Inc , saying it could expand and repurchase stock with the $305 million breakup fee while avoiding all the risk of a major acquisition. The deal announced in July is now under threat after similarly-named but larger rival, Dollar General Corp, outbid it this week with a $9.1 billion hostile takeover proposal. Dollar General had been rebuffed by Family Dollar on previous offers but is seen as likely to win a protracted battle this time."I would rather see them (Dollar Tree) walk away, take the breakup fee and continue buying back a substantial amount of shares," said Stephen Goddard, chief investment officer at London Company, a money manager that owns about 1.2 million Dollar Tree shares. Goddard said the money also could be reinvested in new stores.But if Dollar Tree's bid fails, the company would miss out on an opportunity to more than double its store count and extend its reach to lower-income customers.Dollar Tree hopes to combine its 5,200 stores with Family Dollar's more than 8,000, a move that would make it a top player in budget retailing in North America. Dollar General, meanwhile, has more than 11,000 stores. It has said it is willing to divest up to 1,500 stores to appease regulators if its takeover of Family Dollar pans out.
Dollar General Corporation is a discount retailer in the United States by number of stores, with 9,961 stores located in 39 states as of March 2, 2012, primarily in the southern, southwestern, midwestern and eastern United States. Shares of DG traded higher by 0.03% or $0.02/share to $63.72. In the past year, the shares have traded as low as $53.00 and as high as $65.99. On average, 6384280 shares of DG exchange hands on a given day and today's volume is recorded at 2082539.
Dollar Tree, Inc. (Dollar Tree) is an operator of discount variety stores offering merchandise at the fixed price. Shares of DLTR fell by 0.35% or $-0.195/share to $55.62. In the past year, the shares have traded as low as $49.59 and as high as $60.19. On average, 2996120 shares of DLTR exchange hands on a given day and today's volume is recorded at 1403789.
Family Dollar Stores, Inc. (Family Dollar) operates a chain of more than 7,900 general merchandise retail discount stores in 46 states, providing consumers with a selection of merchandise in neighborhood stores. Shares of FDO traded higher by 0.13% or $0.1/share to $78.65. In the past year, the shares have traded as low as $55.64 and as high as $80.97. On average, 3017750 shares of FDO exchange hands on a given day and today's volume is recorded at 1923165.
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