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Dollar General Ups The Ante in Family Dollar Pursuit

Stocks in this article: DG FDO DLTR GS MS

NEW YORK (The Deal) -- Dollar General (DG)  said Tuesday that it has raised its bid for Family Dollar Stores (FDO)  to $80 per share and is threatening to take its latest offer straight to shareholders if Family Dollar refuses to engage in active deal talks.

TheStreet's Brittany Umar has details on Dollar General's latest bid for Family Dollar:


WATCH: More market update videos on TheStreet TV | More videos from Brittany Umar

Dollar General's revised bid is valued at around $9.1 billion, up from its last $78.50 per share offer, and far surpassing Dollar Tree (DLTR) 's $74.50 per share bid.

"In the event you refuse to engage with us regarding our revised proposal, we will consider taking our persuasive and superior proposal directly to your shareholders," Dollar General chairman and CEO Rick Dreiling said in a statement.

Dollar General is addressing some of Family Dollar's antitrust concerns by agreeing to divest up to 1,500 stores and noted it will pay a $500 million reverse breakup fee if the proposed deal does not meet regulatory standards. The company originally said it would be willing to divest up to 700 stores, if needed. Chesapeake, Va.-based Dollar Tree is entitled to a $305 million termination fee if Dollar General succeeds with its offer.

Family Dollar chairman and CEO Howard Levine said that Dollar General's original proposal did not do much to address key Federal Trade Commission issues, even though Dollar Tree said it would only divest 500 stores, if required.

Dollar General, of Goodlettsville, Tenn., and Charlotte, N.C.-based Family Dollar would have more than 20,000 stores if combined.

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