Company Snapshot: Dollar Tree
Dollar Tree: The Family Dollar Drama Continues
Dollar Tree Stores Inc.
500 Volvo Parkway
Chesapeake, VA 23320-1604
Total Annual Sales:
Macon F. Brock- Chairman
Bob Sasser- CEO
During the past month, Dollar Tree exploded into retail headlines by announcing Family Dollar’s acceptance of its $8.5 billion offer to purchase the number two extreme value, national dollar store chain. The Family Dollar board of directors’ groundbreaking decision to accept the offer had been somewhat forced by a campaign of major stockholders. Complications were sure to follow.
Immediately, another Family Dollar shareholder threatened to sue in order to block the Dollar Tree acquisition, expecting higher bids would soon emerge. As anticipated by CSG’s Insight of August 11, within two weeks speculation about Dollar General’s interest in upping the ante came true, as the industry leader entered with a bid of over $8.9 billion.
Now Family Dollar has rejected the Dollar General offer citing fears of federal antitrust violations. The Family Dollar board has reiterated its comfort in reverting to the lower Dollar Tree bid.
Meanwhile several major Family Dollar shareholders have balked at the idea of accepting an offer of lesser value. Some hope to receive a bid higher than even that of Dollar General’s nearly $9 billion offer. Additional stories are emerging about a cat and mouse game which included past impromptu merger discussions between Family Dollar and Dollar General and a number of proposed talks, including some which had been alternately snubbed by each party.
Recently Chain Store Guide has been the recipient of an extremely high number of inquiries for data on these three national dollar store chains and their locations. CSG’s locations database mirrors the aggressive growth patterns of these giants. Focusing on Dollar Tree, Dollar General and Family Dollar, CSG has added over 6,000 locations, while indicating over 1,200 closings, over the past five years. Our latest monthly update for these three now totals 24,626 locations.
In the meantime the growing drama of a likely major merger between dollar retail chains continues to unwind. Dollar Tree, Family Dollar and Dollar General likely will continue to generate headlines of national importance beyond their stations in retailing. It looks like we are in for a bumpy ride. Don’t forget that Walmart is likely lurking in the background.