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Dollar Tree's offer of $74.50 per share in cash
and stock represents a premium of about 23 percent over Family
Dollar's close of $60.66 on Friday. Family Dollar had about 114
million shares outstanding as of July 5.
Shares of Family Dollar, which has been under pressure from
activist investor Carl Icahn to sell itself, rose about 21
percent to $74.00 in premarket trading on Monday.
Dollar Tree shares were up 4.2 percent at $56.50.
Family Dollar shareholders will get $59.60 in cash and $14.90 in
stock for each share they hold.
Family Dollar caters to lower-income shoppers, many living
paycheck to paycheck, while Dollar Tree mostly targets the
middle class.
Icahn, Family Dollar's largest shareholder with a 9.4 percent
stake, wanted the company to sell itself to Dollar General Corp
to help it cope with stiff competition from big-box retailers
such as Wal-Mart Stores Inc.
J.P. Morgan Securities LLC is financial adviser to Dollar Tree,
and Morgan Stanley & Co. LLC is financial adviser to Family
Dollar.
(Reporting by Ramkumar Iyer and Devika Krishna Kumar in
Bangalore; Editing by Savio D'Souza)
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