Dollar General Corp (NYSE:DG) surged its bid to $9.1 billion from the previous $8.95 billion it had offered to Family Dollar Stores, Inc (NYSE:FDO). Dollar General Corp (NYSE:DG) further threatened a hostile takeover – that it may turn rogue and appeal directly to the shareholders if the replenished offer was rejected this time.

Dollar General Corp (NYSE:DG), the top ranked deep-discount retailer also said that they are willing to pay $ 500 million break-up fee should the deal be rejected on the basis of running afoul of competition law – which was the reason Family Dollar Stores, Inc (NYSE:FDO) declined the offer previously.

Once the deal fell apart, Family Dollar Stores, Inc (NYSE:FDO) instead opted for an $8.5 billion cash-and-stock bid from Dollar Tree Inc. (NASDAQ:DTLR). With the new offer, Family Dollar Stores, Inc (NYSE:FDO) has stated that it would review the offer; however, they would still stick to the deal with Dollar Tree Inc (NASDAQ:DTLR)

Family Dollar Stores, Inc (NYSE:FDO) shares were up by almost half a percent, trading at $80.52 in premarket on Tuesday. This suggested that the investors indeed had expected higher offers.

Rick Drieling, Dollar General Corp (NYSE:DG) Chief Executive wrote a radical letter to the board of Family Dollar Stores, Inc (NYSE:FDO) in which he stated that if they refused to engage with the company about the revised proposal, Dollar General Corp (NYSE:DG) would be forced to take the offer straight to the shareholders.

Currently, the dollar chains are struggling with low gross margin growth, trying to keep the lower-income customers from being lured by Wal-Mart Stores, Inc. (NYSE:WMT).

Wolfe Research noted that the merger of Dollar General Corp (NYSE:DG) and Family Dollar Stores, Inc (NYSE:FDO) would prove to be a healthy competition for Wal-Mart Stores, Inc. (NYSE:WMT)

In context of antitrust clearance, Dollar General Corp (NYSE:DG) said that it was willing to sell 1500 stores to clear the antitrust review, up from their previous proposal of 700 stores.

The company claimed that they have hired Richard Feinstein, a former director of the Bureau of Competition at the Federal Trade Commission, to further validate the company’s antitrust analysis.

Rebuffing antitrust concerns, Dollar General Corp (NYSE:FDO) said that their documents were evidence to the fact that they offered no special products, as the products they offer are the same as offered at any retailer or grocery store.

It further stated that it was actually Wal-Mart Stores, Inc. (NYSE:WMT) that was the primary driver for the company’s pricing decisions.

Family Dollar Stores, Inc (NYSE:FDO) seems to be more inclined towards the offer of Dollar Tree, Inc. (NASDAQ:DLTR), as it is friendlier to their management.

Chief Executive of Family Dollar Stores, Inc (NYSE:FDO), Howard Levine, son of Family Dollar   Stores, Inc (NYSE:FDO) founder, would remain CEO of the Matthews, North Carolina based company, should it be bought by Dollar Tree Inc, (NASDAQ:DLTR). However, if Dollar General Corp (NYSE: DG) succeeds in buying Family Dollar Stores, Inc (NYSE:FDO), Levine is expected to lose his job.

Dollar general Corp (NYSE: DG) has beefed up its antitrust advisory team, to subjugate any further antitrust issues.

The numbers on the book and analysts suggests that Family Dollar Stores, Inc (NYSE:FDO) should have no concerns with anything considering the raised bid and clearance of antitrust issues is evidence that Dollar General Corp (NYSE:FDO) is clearly interested in the deal. However time would tell whether the deal blooms or blows out of proportion.

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