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 Headlines

43 mins ago in Entertainment

Today in entertainment history: May 3

Fresh
dollyparton

A look back at some of the biggest headlines in Hollywood history.

12 hours ago in Viral Videos

The cicadas are coming …

24-overlay

Billions of cicadas will soon emerge after spending 17 years underground and they have a lot of catching up to do.

12 hours ago in Entertainment

Too much ice in your Starbucks?

starbucks265305906988

A federal lawsuit claims Starbucks regularly overfills its cold drinks with ice instead of using the advertised amount of coffee or other liquid in its plastic cups.

17 hours ago in Sports, Viral Videos

It’s not ‘Regulators:’ Warren G butchers ‘Ball Game’

20-overlay-1

WATCH: The rapper messed up the first line and sang off-key.

19 hours ago in Music

Dixie Chicks adding 9 more dates to tour

maguiredixiechicks693363152099

The Grammy-winning country group starts the tour on June 1 in Cincinnati and wraps on Oct. 10 at the Hollywood Bowl in Los Angeles.