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)

Recent News

in Entertainment

WATCH: 60 years of ‘Guinness World Records’

12-overlay14

That's a lot of years of documenting unique records.

in Entertainment

‘Big Bang’ star Jim Parsons making big bank

jimparsons

The TV favorite has earned an estimated $29 million in the past year,

in Entertainment

Kim and Kanye get $440K for leaked engagement video

015 CFDA Fashion Awards at Alice Tully Hall at Lincoln Center - Arrivals

West proposed to Kardashian in spectacular fashion in front of friends and family with fireworks and a 50-piece orchestra at AT&T Park in San Francisco, California in October, 2013, but there was one unwelcome guest - YouTube.com co-founder Chad Hurley.

in Entertainment

Cheating ’19 Kids’ TV star Josh Duggar enters rehab

joshduggar

The former reality TV star Josh Duggar admitted cheating on his wife following reports he was a subscriber to the hacked Ashley Madison website.

in Entertainment

Dead rats anyone? Hollywood gets creative to promote movies

moviepromos

Hollywood studios are going to ever more creative lengths to attract attention in a jam-packed entertainment market where social media plays a key role in promoting content.