Dollar Store Bidding War: Dollar General Offers Nearly $10B

Dollar General's $9.7 billion offer surpasses Dollar Tree's $8.5 billion bid from three weeks ago in an effort to buy Family Dollar.
Posted at 5:59 PM, Aug 18, 2014

​In the dollar store bidding wars, Dollar General has put up the largest stack of bills yet in an attempt to snatch up competitor Family Dollar — $9.7 billion to be exact. Dollar General is offering to pay $78.50 per share of Family Dollar's stock —

which is much more than Dollar Tree's $74.50-per-share offer just weeks ago. (Via Fortune)

But the dust hasn't settled yet. As The Deal points out, much smaller Dollar Tree could go back and sweeten its bid.

"Their original offer made about three weeks ago only included cash, so they could add equity to up that offer."

If Family Dollars does pair with Dollar General, the combined company would own 20,000 stores nationwide, making it the largest retail store location-wise. If Dollar Tree and Family Dollar combine, they'd make for 13,000 stores.

But, why such a steep price for stores that sell things for so little? As Bloomberg points out, it's a chance to compete with the big boys like Walmart — the nation's largest retailer in terms of revenue. 

"The bottom line is these two people are killing Walmart. I mean, that's the headline here."

"Howard Davidowitz has noted, they make make Walmart look expensive." 

TIME notes that although the recession forced families to shrink their budgets, dollar stores profited. "The dollar store has been one of the great success stories of the recession era, with chains such as Dollar Tree, Family Dollar, and Dollar General posting record sales figures, broad expansions, and soaring stock prices over the past half-dozen or so years. " 

There's no word yet on whether Dollar Tree will make a new offer. Dollar General says it's willing to sell 700 stores to avoid antitrust concerns.