NEW YORK (TheStreet) -- Dollar General (DG) has hired Richard A. Feinstein, a Washington-based partner at Boies, Schiller & Flexner who was formerly a top antitrust official at the Federal Trade Commission, to increase pressure on Family Dollar (FDO) to break its $8.5 billion merger with Dollar Tree (DLTR) and begin negotiating a new deal.
Feinstein's support of Dollar General's antitrust analysis and his resume convey the seriousness of the company's revised bid for Family Dollar, and are being used to undermine remaining objections related to antitrust. However, the ex-antitrust regulator is so fresh from the FTC he won't be able to argue in front of the commission on behalf of his newest client.
Feinstein was director of the FTC's Bureau of Competition for a four-year stint that ended last June and he remains subject to a two-year cooling-off period. While a so-called "revolving door" between Washington and large corporations is commonplace, it is rare in large merger efforts that a company so publicly uses an independent counsel with close regulatory ties as a deal-making pressure point.
Dollar General is trying to remove antitrust as an issue that keeps Family Dollar from the bargaining table. On Tuesday, the company revised its bid for Family Dollar, offering $80 a share in cash for the discount retail chain and antitrust concessions including a $500 million reverse break-up fee and the divestiture of up to 1,500 stores if ordered to do so by the FTC. Family Dollar is reviewing the offer, but continues to recommend a $74.50 a share cash and stock merger with Dollar Tree that it says carries lower antitrust risk.