The Washington Post

Business digest: Dollar General bids $9.7 billion for Family Dollar

Dollar General started a bidding war on Monday when it offered to pay $8.95 billion for Family Dollar, which rival Dollar Tree was planning to purchase for $8.5 billion. (Reuters)
Dollar General bids for Family Dollar

Dollar General isn’t about to be left out in the cold. The discounter is starting a bidding war for Family Dollar with a $9.7 billion offer as it attempts to trump a $8.5 billion bid by Dollar Tree.

For Dollar General, the decision to enter the fray was clear because Family Dollar had been on its radar for a while. Dollar General Chairman and chief executive Rick Dreiling said during a conference call Monday that the company had expressed interest in combining with Family Dollar multiple times during the past few years.

He said Dollar General was surprised when Family Dollar announced its deal with Dollar Tree. “It’s all water under the bridge. We’re ready to move forward,” Dreiling said.

A Dollar General and Family Dollar combination would create a chain with almost 20,000 stores in 46 states and sales of more than $28 billion. The two businesses also have similar pricing strategies, offering shoppers most products at $10 or less. At Dollar Tree, everything in its stores costs just a buck.

Family Dollar has come into play because of its business struggles. The Charlotte-based company has been shuttering stores and cutting prices in hopes of boosting its financial performance. In June, investor Carl Icahn urged the company to put itself up for sale.

Dollar General, based in Goodlettsville, Tenn., said it would pay $78.50 per share in cash. That’s 3 percent higher than Family Dollar Stores’ Friday closing price of $76.06. Dollar General put the deal’s value at $9.7 billion.

Last month Dollar Tree, , based in Chesapeake, Va., made an $8.5 billion bid for Family Dollar. It offered to pay $59.60 in cash and the equivalent of $14.90 in shares of Dollar Tree for each share held. The companies valued the transaction at $74.50 per share at the time. Including debt and other costs, the companies estimated the transaction to be worth about $9.2 billion.

— Associated Press

Confidence index up for 3rd month in row

Home builders feel better about their prospects these days.

The National Association of Home Builders reported Monday that its home builder confidence index is up for the third straight month, to its highest level since January.

A steadily improving job market, low interest rates and prices that in much of the country remain below past highs are helping to drive greater demand for new homes, the association said.

“Builder confidence appears to be firming following an uneven spring,” NAHB chief economist David Crowe said.

The trade group surveys its members monthly to generate a score of 1 to 100 measuring confidence. Conditions above 50 are generally considered positive. In August, the index measured 55. Builders are most confident about prospects for sales in the next six months — which measured 65 — and current sales — 58. The measure of current buyer traffic lags, at 42, but climbed three points this month.

Builders still face a number of challenges, said NAHB chairman Kevin Kelly, a builder and developer from Wilmington, Del., including tight credit conditions for borrowers and a shortage of finished lots and labor.

Builders were most confident in the West and least confident in the Northeast.

— Los Angeles Times

Also in Business

— From news services

Coming Today



Success! Check your inbox for details. You might also like:

Please enter a valid email address

See all newsletters

Show Comments
Most Read



Success! Check your inbox for details.

See all newsletters

Your Three. Videos curated for you.
Play Videos
From clubfoot to climbing: Double amputee lives life of adventure
Learn to make traditional soup dumplings
Deaf banjo player teaches thousands
Play Videos
Unconventional warfare with a side of ale
The rise and fall of baseball cards
How to keep your child safe in the water
Play Videos
'Did you fall from heaven?': D.C.'s pick-up lines
5 ways to raise girls to be leaders
How much can one woman eat?
Play Videos
How to get organized for back to school
How to buy a car via e-mail
The signature drink of New Orleans

To keep reading, please enter your email address.

You’ll also receive from The Washington Post:
  • A free 6-week digital subscription
  • Our daily newsletter in your inbox

Please enter a valid email address

I have read and agree to the Terms of Service and Privacy Policy.

Please indicate agreement.

Thank you.

Check your inbox. We’ve sent an email explaining how to set up an account and activate your free digital subscription.