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Business: Dollar General Threatens Family Dollar With “Lifeline” Tactic

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Looking like a move from the TV Game Show, “Who Wants To Be A Millionaire”, Retail giant Dollar General Corp.(NYSE: DG) threatened Wednesday to take their offer to buy Family Dollar Stores (NYSE:FDO) to the shareholders.

Dollar General raised its bid to merge with rival retail chain Family Dollar to $9.1 billion or $80 per share. In addition, it also plans to divest 1,500 stores to “steer clear of antitrust issues,” reports indicate. The company’s interest is the fallout of Dollar Tree Inc.’s interest in buying Family Dollar for $8.5 billion.  In the meantime Billionaire investor Carl Ichan, who was at one point a majority shareholder, sold his stake in Family Dollar Stores making $200 million.

However, for Family Dollar, time moves on.

The company announced today a declaration of a regular quarterly cash dividend on the Company’s common stock of $0.31 per share. Family Dollar stockholders will be able to get their payday Wednesday, October 15, 2014. These cash dividends will go to shareholders of record at the close of business on Monday, September 15, 2014.

There’s no doubt the buyout would make Dollar General a leading retailer in the quest to take over the lower half of the shopping world. With Dollar Tree spawning it’s clone Dollar Deals, Dollar General has yet to really make any sort of waves in a market that’s growing.  Family Dollar’s reputation for being the neighborhood store has faltered, making the merger a great decision.

Sometimes it’s better to bow out gracefully, and on your own terms in comparison to falling completely on one’s face. Analysts speculate that Family Dollar will take the deal by the end of this week. In a sense, they may have no choice if Dollar General takes the deal directly to shareholders.

The Dow Jones Industrial Average  rose 0.06% to 17,078.28. The S&P 500  declined 0.08% to 2,000.72 after reaching a record intraday high of 2,009.28. The Nasdaq was down 0.56% to 4,572.56.

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Robert D. Cobb
Founder, Publisher and CEO of INSCMagazine. Works have appeared and featured in places such as Forbes, Huffington Post, ESPN and NBC Sports to name a few. Follow me on Twitter at @RobCobb_INSC, email me at [email protected]

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