Getting repeated rejected by its rival in an attempt to buy them out, Dollar General (NYSE:DG) is now getting ready for a hostile takeover. The opening offer of $80 a share in cash by Dollar General (NYSE:DG) was rejected only last week. Why you may ask? Well only because the Family Dollar Stores (NYSE:FDO) have accepted a deal by Family Tree (NASDAQ:DLTR) already for $8.5 Billion.

The discount store chain, Dollar General’s (NYSE:DG), deal didn’t go through because it wouldn’t clear the anti-trust faction scrutiny. The North Carolina based company based in Matthews, Family Tree (NASDAQ:DLTR) is pretty vocal that it fears the anti-trust group posing a lot of question directed towards them merging with Dollar General (NYSE:DG).

However, so bent upon acquisition are they that the willingness to divest 1500 stores is an option they are willing to consider. Not only that but Dollar General (NYSE:DG) is also ready to pay $500 reverse backup fees in more antitrust issues get in the way of its takeover plan.

The Goodlettsville, Tennessee based company, Dollar General (NYSE:DG) is bound to win this acquisition tug of war, speculates the analyst Sterne Agee. He thinks that the offer presented to family Dollar (NYSE:FDO) is a solid offer making good financial sense. Family Dollar (NYSE:FDO) is not in a great situation and has still received good bids from two companies willing to buy it out. They are desperately attempting to attract more and more customers and has been cutting prices considerably, however they were still forced to shut down some of its stores.

June this year, Family Dollar’s (NYSE:FDO) activist investor, Carl Icahn forced the company to sell itself out. In July, Family Dollar (NYSE:FDO) accepted the rival bid of $59.6 in cash, $14.90 in Dollar Tree (NASDAQ:DLTR) shares amounting to a total of $74.5 for each share being held. Family Dollar (NYSE:FDO) is sure that this deal will not face any anti-trust hurdles.

The similarity which will raise an eyebrow from anti-trust is the fact that both Dollar General (NYSE:DG) and Family Dollar (NYSE:FDO) sell products which fall into different price categories. Dollar Tree (NASDAQ:DLTR) however, only sells products costing a dollar.

Rick Dreiling, Dollar General (NYSE:DG) CEO and Chairman, tempted the shareholders of family Dollar (NYSE:FDO) by stating that if they choose their bid Family Dollar (NYSE:FDO) shares would get an immediate liquidity boost. The strategy was based on the hope that all Family Dollar (NYSE:FDO) shareholders would opt for the Dollar General (NYSE:DG) bid, putting pressure on the Family Dollar (NYSE:FDO) management and board of directors.

October 8 will mark the expiry of the bid from Dollar General (NYSE:DG)which was originally priced at $78.5 per share, now includes a 32% premium for the family Dollar (NYSE:FDO) stock. The day the Dollar Tree (NASDAQ:DLTR) deal was announced, Family Dollar’s (NYSE:FDO) share price reduced by 13 cents when trading in July. Earlier this month their stock price hit an all-time high record of $80.97.

Seems that this financial war has momentarily solved their problems of reduced foot traffic; the shareholders would focus on the operational problems of the company once the sale of the company goes through.

Get Free Updates and Stock Alerts!

*We only send one email per week