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)

News

in Entertainment

This weekend in entertainment history

michael-jackson

A look at some of Hollywood's most memorable headlines.

in National

Making headlines this week

AP703639293459_11

A look back on this week's biggest stories and the headlines you may have missed.

in Entertainment, Viral Videos

What color is this dress?

19-overlay6

The "great dress debate" has been dividing the Internet. Are you team #WhiteandGold or team #BlueandBlack?

in Entertainment

PHOTOS: Leonard Nimoy through the years

AP8209190316_5

Although he capped his "Star Trek" run with a notable career as both an actor and director, in the public's mind he will always be Spock.

in Entertainment

‘Star Trek’ star Leonard Nimoy dead at 83

nimoy

The world famous Mr. Spock has passed away.