Investors in Texas may be interested in the latest developments concerning the ongoing issues with the proposed merger between Family Dollar and Dollar Tree. On Jan. 22, Family Dollar shareholders voted to approve the merger proposed by Dollar Tree, valued at $8.5 billion. The vote was the culmination of a long takeover battle that attracted some of the wealthiest hedge funds on the planet.
The overwhelming vote is representative of the eroding confidence many shareholders had concerning the likelihood that competing bidder Dollar General would have a viable chance to move forward with Family Dollar. According to the CEO of Family Dollar, approximately 90 percent of the shareholders voted for the Dollar Tree merger. Family Dollar became available for purchase during the first half of 2014 due to miscues that included over-expanding and making pricing changes that were poorly received. Dollar Tree had been touted as the most interested, but many speculated that Dollar General would be the better selection.
Before Family Dollar and Dollar Tree finalized the merger, prominent hedge funds began pushing for Dollar General to be considered for the merger bid. Once a potential merger was announced during July 2014, Dollar General attempted to circumvent the deal by making a cash offer that was unsolicited. Dollar General then criticized the bidding process, claiming that it seemed unclear and that any antitrust concerns were overstated.
Companies in these types of complex business transactions typically depend on guidance provided by legal counsel throughout the process. As was the case in this deal as well as other proposed acquisitions of large companies in the same industry, there are antitrust and regulatory hurdles that attorneys can point out and help overcome.
Source: Forbes Magazine, "Family Dollar Shareholders Back Dollar Tree Merger After Long Fight", Antoine Gara, Jan. 22, 2015