Dollar Tree and Family Dollar have amended their merger agreement to include a commitment by Dollar Tree to divest as many stores as necessary or advisable to obtain antitrust clearance for the previously announced cash and stock transaction.
All other terms and conditions of the merger agreement remain the same as announced on July 28, 2014. The two companies also said that their expectations for a closing date for the transaction have accelerated to as early as the end of November 2014.
News of the amended merger agreement coincided with Family Dollar’s rejection Dollar General’s revised proposal made on Sept. 2 on the basis of antitrust regulatory considerations.
Dollar Tree and Family Dollar expect the Federal Trade Commission to issue a second request for additional information on Sept. 8, and said they are confident that regulatory approval will be obtained.
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“Dollar Tree is committed to working hard to complete our acquisition of Family Dollar as quickly as possible. Our amended agreement is clearly superior to Dollar General’s revised proposal based on antitrust risk, deal certainty and time value of money,” said Bob Sasser, Dollar Tree’s CEO. “Unlike Dollar General, we expect to be required to divest few, if any, stores because our business model is significantly different from Family Dollar’s model. Our product assortment and pricing is not driven by local competition, and we have very limited store overlap. As evidence of our confidence in and commitment to closing this transaction without delay, we are amending our merger agreement to provide for a commitment to divest as many stores as necessary to obtain antitrust clearance.”
Under the terms of the agreement announced on July 28, Family Dollar shareholders will receive $59.60 in cash and $14.90 equivalent in Dollar Tree shares for each common share of Family Dollar owned, subject to a collar. At closing, Family Dollar shareholders would own no less than 12.7% and no more than 15.1% of the outstanding common stock of Dollar Tree.
“Dollar Tree and Family Dollar continue to have productive discussions with the FTC,” added Sasser, “and despite the anticipated second request from the FTC, we remain confident in our ability to complete our transaction with Family Dollar by as early as the end of November 2014 and deliver expeditiously the closing certainty and substantial value that this transaction provides to both companies’ shareholders, customers and employees. We will continue to work hard to complete our acquisition of Family Dollar as quickly as possible.”
J.P. Morgan Securities is acting as exclusive financial adviser to the board of directors of Dollar Tree, and J.P. Morgan Chase Bank, N.A., Wells Fargo Bank, National Association, Bank of America, N.A., Royal Bank of Canada and U.S. Bank, National Association, and certain of their affiliates have committed to provide financing for the transaction. Wachtell, Lipton, Rosen & Katz and Williams Mullen are acting as legal counsel to Dollar Tree in connection with the transaction. Morgan Stanley & Co. LLC is acting as exclusive financial adviser to the board of directors of Family Dollar in connection with the transaction. Cleary Gottlieb Steen & Hamilton LLP is serving as legal counsel to Family Dollar.
Date: September 05, 2014