Dollar General Provides Update on FTC Review of Its Proposed Acquisition of Family Dollar
Thu, 15 Jan 2015
GOODLETTSVILLE, Tenn.--(BUSINESS WIRE)--
Dollar General Corporation (NYSE: DG) today provided an update on the
status of its discussions with the Federal Trade Commission (“FTC”)
regarding its proposed acquisition of Family Dollar Stores, Inc. (NYSE:
FDO).
FTC Review of Dollar General’s Proposed
Acquisition of Family Dollar
As previously disclosed, since the launch of its tender offer to acquire
all outstanding shares of Family Dollar, Dollar General has been
actively engaged with the FTC. The Company has provided the agency with
tens of thousands of documents and has participated in numerous meetings
with FTC staff. This engagement is ongoing, and the FTC has reached no
final conclusion regarding the number of divestitures that would be
required by a Dollar General/Family Dollar combination. Dollar General
has also had discussions with various potential buyers who have
expressed interest in acquiring stores that may be required to be
divested.
Despite the progress made to date and Dollar General’s desire and
intention to continue working with the FTC to further refine its
analysis, Dollar General has concluded that the additional step of
certifying substantial compliance with the FTC’s request for further
information and documentary material (“Second Request”) is necessary. To
that end, Dollar General has been, and continues to be, concurrently
working toward certifying substantial compliance, which Dollar General
currently targets to complete by February 10, 2015. Dollar General has
chosen not to be constrained by a timing agreement with the FTC. In the
absence of such an agreement, the FTC will have 30 days from the date on
which Dollar General certifies substantial compliance with the Second
Request to determine either to allow the transaction to close or sue to
enjoin the transaction. Although Dollar General believes that this
matter is one that should be amenable to resolution by consent agreement
with the FTC, it is prepared to defend litigation if necessary.
In its review of the proposed Dollar General/Family Dollar transaction,
the FTC has departed from the approach used to analyze retail mergers
over recent years and has instead relied heavily on an untested
theoretical model for predicting circumstances in which pricing will
increase. The use of this model as a predictor of the likelihood of
price increases is controversial, and the model is highly sensitive to
adjustments in its assumptions and specifications. Based on these and
other factors, including Dollar General’s national, Walmart-focused
prices, the Company believes that if given the opportunity to complete
the FTC review process, including substantial compliance and potential
litigation, the number of required store divestitures would be
manageable and should not exceed the 1,500 store divestitures offered by
Dollar General, particularly if Family Dollar becomes an ally in Dollar
General’s discussions with the FTC.
Details of Tender Offer and Family Dollar
Special Meeting
Family Dollar shareholders should tender their shares into Dollar
General’s offer before it expires and vote the GOLD proxy card in order
to vote AGAINST the merger agreement with Dollar Tree and the additional
related proposals described in the definitive proxy materials. By
tendering their shares into Dollar General’s tender offer and by voting
the GOLD proxy card, Family Dollar shareholders will be sending a clear
message to the Family Dollar Board to promptly engage in discussions
with Dollar General. A vote against the merger agreement with Dollar
Tree will not obligate Family Dollar shareholders to tender their shares
in the Dollar General tender offer. However, anyone desiring to
participate in the Dollar General tender offer must tender their shares
pursuant to the tender offer prior to its expiration date.
Family Dollar shareholders who need additional copies of the tender
offer statement, definitive proxy statement or related materials or who
have questions regarding the offer or proxy solicitation should contact
Innisfree M&A Incorporated, the information agent for the offer and the
proxy solicitation, toll-free at (877) 750-5837.
Goldman, Sachs & Co. is acting as financial advisor to Dollar General.
KKR Capital Markets and MCS Capital Markets are advising Dollar General
on the financing. Simpson Thacher & Bartlett LLP is acting as its legal
counsel.
Forward-Looking Statements
Dollar General includes “forward-looking statements” within the meaning
of the federal securities laws throughout this release. A reader can
identify forward-looking statements because they are not limited to
historical fact or they use words such as “scheduled,” “may,” “will,”
“could,” “should,” “would,” “expect,” “believe,” “anticipate,”
“project,” “plan,” “estimate,” “forecast,” “goal,” “objective,”
“committed,” “intend,” “continue,” or “will likely result,” and similar
expressions that concern Dollar General’s strategy, plans, intentions or
beliefs about future occurrences or results.
Forward-looking statements are subject to risks, uncertainties and other
factors that may change at any time and may cause actual results to
differ materially from those that Dollar General expected. Many of these
statements are derived from Dollar General’s operating budgets and
forecasts, which are based on many detailed assumptions that Dollar
General believes are reasonable, or are based on various assumptions
about certain plans, activities or events which we expect will or may
occur in the future. However, it is very difficult to predict the effect
of known factors, and Dollar General cannot anticipate all factors that
could affect actual results that may be important to an investor. All
forward-looking information should be evaluated in the context of these
risks, uncertainties and other factors, including those factors
disclosed under “Risk Factors” in Dollar General’s most recent Annual
Report on Form 10-K and any subsequent quarterly filings on Form 10-Q
filed with the Securities and Exchange Commission.
All forward-looking statements are qualified in their entirety by the
cautionary statements that Dollar General makes from time to time in its
SEC filings and public communications. Dollar General cannot assure the
reader that it will realize the results or developments Dollar General
anticipates, or, even if substantially realized, that they will result
in the consequences or affect Dollar General or its operations in the
way Dollar General expects. Forward-looking statements speak only as of
the date made. Dollar General undertakes no obligation to update or
revise any forward-looking statements to reflect events or circumstances
arising after the date on which they were made, except as otherwise
required by law. As a result of these risks and uncertainties, readers
are cautioned not to place undue reliance on any forward-looking
statements included herein or that may be made elsewhere from time to
time by, or on behalf of, Dollar General.
Important Additional Information
Dollar General has filed a definitive proxy statement and relevant
documents in connection with the special meeting of the shareholders of
Family Dollar at which the Family Dollar shareholders will consider
certain proposals regarding the potential acquisition of Family Dollar
by Dollar Tree, Inc. (the “Special Meeting Proposals”). Dollar General
and its directors and executive officers and other members of its
management and employees may be deemed to be participants in the
solicitation of proxies from Family Dollar’s shareholders in connection
with the Special Meeting Proposals. SHAREHOLDERS OF FAMILY DOLLAR ARE
URGED TO READ THE PROXY STATEMENT AND ANY OTHER RELEVANT DOCUMENTS FILED
WITH THE SEC BECAUSE THEY CONTAIN IMPORTANT INFORMATION. Investors and
security holders may obtain a free copy of the proxy statement and other
documents filed by Dollar General at the SEC’s web site at http://www.sec.gov
or by contacting the information agent for the proxy solicitation,
Innisfree M&A Incorporated, at (877) 750-5837 (toll free for
shareholders) or (212) 750-5833 (collect for banks and brokers).
About Dollar General Corporation
Dollar General Corporation has been delivering value to shoppers for 75
years. Dollar General helps shoppers Save time. Save money. Every day!®
by offering products that are frequently used and replenished, such as
food, snacks, health and beauty aids, cleaning supplies, basic apparel,
house wares and seasonal items at low everyday prices in convenient
neighborhood locations. With more than 11,500 stores in 40 states,
Dollar General has more retail locations than any retailer in America.
In addition to high quality private brands, Dollar General sells
products from America's most-trusted manufacturers such as Clorox,
Energizer, Procter & Gamble, Hanes, Coca-Cola, Mars, Unilever, Nestle,
Kimberly-Clark, Kellogg's, General Mills, and PepsiCo. For more
information on Dollar General, please visit www.dollargeneral.com.
Investors: Dollar General Corporation Mary
Winn Pilkington, 615-855-5536 or Media: Brunswick
Group: Steve Lipin or Shahed Larson, 212-333-3810 or Dollar
General Corporation: Media Hotline, 877-944-DGPR (3477) or Dan
MacDonald, 615-855-5209 or Crystal Ghassemi, 615-855-5210
