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

‘Empire’ creators face lawsuit over Cookie

Fresh
empire

Sophia Eggleston, of Detroit, Michigan has filed a $300 million lawsuit claiming the show's central character Cookie, played by Taraji P. Henson, is so similar to her that creator Lee Daniels must have used her as his muse.

in Entertainment

Robert Downey, Jr. is laughing all the way to the bank

Fresh
robertdowney

The "Iron Man" star is once again Hollywood's highest paid man.

in National, World

Climate plan shows U.S. ‘can change the world’

Fresh
23-overlay1

The plan, which also mandates a shift to renewable energy from coal-fired electricity, is meant to put the U.S. in a strong position at international talks in Paris later this year on reaching a deal to curb global warming.

in Entertainment

‘Dungeons & Dragons’ coming to the big screen

dungeonsanddragons

Warner Brothers says the popular fantasy role-playing game is being converted into a feature film.

in National

More fights ahead on Planned Parenthood after Senate vote

12-overlay

Now that the Senate has derailed Republican legislation halting federal dollars for Planned Parenthood, one thing seems clear: Many on both sides think they can ring up gains from the battle.