Sunday, December 5, 2021
65 F
Fort Worth

Family Dollar investor sues to block Dollar Tree takeover

🕐 2 min read

 

Jef Feeley (c) 2014, Bloomberg News.

WILMINGTON, Del. – A Family Dollar Stores Inc. shareholder contends that directors shortchanged investors in the discount chain by agreeing to an $8.5 billion takeover by rival Dollar Tree Inc. in a deal that discourages other bidders.

Dollar Tree’s $74.50-a-share cash-and-stock offer for the 8,000-store chain undervalues Matthews, North Carolina-based Family Dollar and directors failed to properly shop around for the highest price, Shiva Stein, a Family Dollar investor, said in a suit filed Thursday in Delaware Chancery Court.

“The proposed transaction offers unfair and inadequate consideration that does not constitute a maximization of stockholder value,” Stein said. She’s seeking to block the deal or recover damages for herself and other investors if it goes through.

The suit may be the first shareholder challenge to the deal, which was prompted by billionaire investors Carl Icahn and Nelson Peltz, who acquired major stakes in Family Dollar. Peltz made an unsolicited bid for the chain in 2011 in an unsuccessful attempt to attract other suitors.

Bryn Winburn, a Family Dollar spokeswoman, didn’t immediately respond to phone calls seeking comment on Stein’s suit.

Family Dollar Chief Executive Officer Howard Levine agreed to sell the company his father founded after years of struggling to compete with other discount chains, including Dollar Tree, Wal-Mart Stores Inc. and current dollar-store market leader, Dollar General Corp.

Stein contended in the complaint that analysts have said Family Dollar shares are worth as much as $79 apiece and that Dollar Tree’s offer provides only $59.60 in cash along with stock to bring the final value of the bid to $74.50.

Family Dollar’s directors also wrongfully allowed Chesapeake, Virginia-based Dollar Tree to structure the deal in a way to discourage other bidders and put in place a $305 million termination fee, Stein said in her suit.

The new Dollar Tree, which plans to keep operating separate chains, would have more than 13,000 locations across the U.S. and Canada, with 145,000 employees. Dollar General and Wal-Mart each have about 11,000 stores.

Robert Francis
Robert is a Fort Worth native and longtime editor of the Fort Worth Business Press. He is a former president of the local Society of Professional Journalists and was a freelancer for a variety of newspapers, weeklies and magazines, including American Way, BrandWeek and InformatonWeek. A graduate of TCU, Robert has held a variety of writing and editing positions at publications such as the Grand Prairie Daily News and InfoWorld. He is also a musician and playwright.

Related Articles

Our Digital Sponsors

Latest Articles

Fort Worth Business Press Logo
This advertisement will close in
00
Months
00
Days
00
Hours
00
Minutes
00
Seconds
seconds..
Click here to continue to Fort Worth Business Press

Not ready to subscribe?

Try a few articles on us.

Enter your email address and we will give you access to three articles a month, to give us a try. You also get an opportunity to receive our newsletter with stories of the day.

This field is for validation purposes and should be left unchanged.

Get our email updates

Stay up-to-date with the issues, companies and people that matter most to business in the Fort Worth.

  • Restaurants
  • Technology
  • and more!

FWBP Morning Brief

FWBP 5@5

Weekend Newsletter

  • Banking & Finance
  • Culture
  • Real Estate