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

Today in entertainment history: March 31

Fresh
jimi

A look back at Hollywood's headlines.

in National

FBI: Shooting at NSA gate at Fort Meade not related to terrorism

NSAshooting

Officials say two men, disguised as women, tried to ram the gates of Fort Meade, where the National Security Agency is housed.

in National, Viral Videos

Girl, 4, boards bus for 3 a.m. snack run

16-overlay3

Little Annabelle Ridgeway was determined to get a slushie.

in Entertainment

Trevor Noah set to replace Stewart on ‘Daily Show’

trevornoah

Comedy Central has named Trevor Noah, a 31-year-old comedian from South Africa, as Jon Stewart's replacement.

in Entertainment

‘Home’ tops weekend box office

home

Jennifer Lopez and Rihanna's new animated movie raked in $54 million this weekend.