NEW YORK: Family Dollar Stores Inc rejected a US$9 billion (RM28.44 billion) buyout offer from Dollar General Corp that it said could run foul of competition law, opting instead for a smaller bid from Dollar Tree Inc that guarantees a job for its chief executive officer.
Family Dollar, the second-largest dollar store in the United States, said it believed a deal with its larger rival would be unlikely to win antitrust approval, despite a promise by Dollar General to close some stores.
“We will not jeopardise the Dollar Tree deal for a transaction with Dollar General that
has a high likelihood of not closing due
to antitrust considerations,” said Ed Garden, an independent director on Family Dol-
lar’s board and co-founder of Trian Fund Management LP, a large shareholder, which holds 7.3 per cent in Family Dollar as of July 27.
Dollar stores, a popular choice for penny-pinching customers in a weak United States economy, have come under pressure to merge as competition intensifies, particularly with Wal-Mart Stores Inc opening more small-format stores. Reuters