Family Dollar Board Reaffirms Recommendation
in Support of Merger Agreement with Dollar Tree
Family Dollar Stores, Inc. (NYSE:FDO) announced today that its
Board of Directors has unanimously rejected the non-binding
proposal made by Dollar General Corporation (NYSE:DG) on the basis
of antitrust regulatory considerations. In addition, the Family
Dollar Board unanimously reaffirmed its recommendation in support
of the merger agreement with Dollar Tree, Inc. (NASDAQ:DLTR).
In negotiating the merger agreement with Dollar Tree, the Family
Dollar Board ensured that the agreement permits the Board,
consistent with its fiduciary duties, to negotiate with, provide
due diligence materials to, and even terminate the merger agreement
to enter into a new agreement with, a competing bidder. However, as
is customary, the Board may commence negotiations and due diligence
access only if, among other factors, the Board determines that a
proposal from a competing bidder is reasonably expected to lead to
a superior proposal that “is reasonably likely to be completed on
the terms proposed.” The Family Dollar Board, after consultation
with its financial and legal advisors who have conducted an
extensive antitrust analysis, determined that the Dollar General
proposal fails to satisfy this requirement. The Board’s decision
follows the unanimous recommendation of a committee of four
non-management independent directors that has been overseeing the
Company’s consideration and exploration of strategic alternatives
since January 2014. This committee consists of Glenn A. Eisenberg;
Ed Garden; George R. Mahoney, Jr.; and Harvey Morgan.
Howard R. Levine, Chairman and CEO of Family Dollar, stated,
“Our Board of Directors, with the assistance of outside advisors
and consultants, has been carefully analyzing the antitrust issues
in a potential combination with Dollar General since the beginning
of this year, as detailed in the Company’s preliminary proxy
statement that was filed by Dollar Tree with the SEC on August 11.
Our Board reviewed, with our advisors, all aspects of Dollar
General’s proposal and unanimously concluded that it is not
reasonably likely to be completed on the terms proposed.
Accordingly, our Board rejects Dollar General’s proposal and
reaffirms its support for the pending merger with Dollar Tree.”
Mr. Levine continued, “I would also like to note that Dollar
General’s letter, sent late last night, contained blatant
mischaracterizations and did nothing to address the antitrust
issues in Dollar General’s proposal.”
Ed Garden, a co-founder and partner at Trian Fund Management,
L.P., a large shareholder of the Company, said, “Consistent with
its fiduciary duties, the Company’s Board has sought to maximize
shareholder value while considering the certainty of closing a
transaction. The CEO of Dollar General said he believes that
antitrust is not a risk but did not put forth a proposal that
eliminates regulatory risk for Family Dollar shareholders. Given
the significant antitrust issues involved with Dollar General’s
proposal, we will not jeopardize the Dollar Tree deal for a
transaction with Dollar General that has a high likelihood of not
closing due to antitrust considerations. We remain fully committed
to the Dollar Tree transaction.”
Prior to signing the merger agreement, the Family Dollar Board,
working with its advisors, engaged a number of times since February
2013 with Dollar General, referred to in the preliminary proxy
statement as Company A. In January 2014, representatives of Dollar
General postponed and then cancelled a scheduled meeting with
Family Dollar and said they would be in touch in the spring of
2014. As further detailed in the preliminary proxy statement, the
Family Dollar Board, working with its advisors, initiated a
strategic review in January 2014, which included an extensive
antitrust analysis of a combination with Dollar General by the
Company’s outside legal advisors and an econometric consultant.
Family Dollar contacted Dollar General on June 9, 2014, to request
that the companies’ respective antitrust lawyers meet to discuss
antitrust law perspectives on a Family Dollar/Dollar General
business combination. Dollar General declined to schedule a
discussion on antitrust issues. A meeting was scheduled between the
parties on June 19, 2014. Prior to that meeting, a number of
shareholders (including the Company’s largest shareholder at the
time) and analysts publicly stated that a sale of the Company
should or would occur imminently. At the June 19 meeting,
representatives of Dollar General stated that they were not
interested in pursuing a strategic transaction at that time. At the
time of the June 19 meeting, Family Dollar was bound by a customary
non-disclosure agreement with Dollar Tree that prohibited
disclosure of the existence of any discussions with Dollar
Tree.
Glenn A. Eisenberg, chair of the committee of non-management
independent directors overseeing Family Dollar’s consideration and
exploration of strategic alternatives since January, commented,
“The directors have been diligent in their approach to the process
that led up to the merger agreement with Dollar Tree and believe
the Dollar Tree transaction offers substantial and certain value to
our stockholders.”
Morgan Stanley & Co. LLC is serving as exclusive financial
advisor to Family Dollar and Cleary Gottlieb Steen & Hamilton
LLP is serving as legal counsel.
Important Information for Investors and
Shareholders
This communication does not constitute an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of
any vote or approval, nor shall there be any sale of securities in
any jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. No offer of securities
shall be made except by means of a prospectus meeting the
requirements of Section 10 of the Securities Act of 1933, as
amended. In connection with the proposed merger between Dollar Tree
and Family Dollar, on August 11, 2014, Dollar Tree filed with the
Securities and Exchange Commission (SEC) a registration statement
on Form S-4 that included a preliminary proxy statement of Family
Dollar that also constitutes a prospectus of Dollar Tree. The
registration statement has not yet become effective. After the
registration statement has been declared effective by the SEC, the
definitive proxy statement/prospectus will be delivered to
shareholders of Family Dollar. INVESTORS AND SECURITY HOLDERS OF
FAMILY DOLLAR ARE URGED TO READ THE DEFINITIVE PROXY
STATEMENT/PROSPECTUS (INCLUDING ALL AMENDMENTS AND SUPPLEMENTS
THERETO) AND OTHER DOCUMENTS RELATING TO THE MERGER THAT WILL BE
FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME
AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE
PROPOSED MERGER. Investors and security holders will be able to
obtain free copies of the registration statement and the definitive
proxy statement/prospectus (when available) and other documents
filed with the SEC by Dollar Tree and Family Dollar through the
website maintained by the SEC at http://www.sec.gov. Copies of the
documents filed with the SEC by Dollar Tree will be available free
of charge on Dollar Tree’s internet website at www.DollarTree.com
under the heading “Investor Relations” and then under the heading
“Download Library” or by contacting Dollar Tree’s Investor
Relations Department at 757-321-5284. Copies of the documents filed
with the SEC by Family Dollar will be available free of charge on
Family Dollar’s internet website at www.FamilyDollar.com under the
heading “Investor Relations” and then under the heading “SEC
Filings” or by contacting Family Dollar’s Investor Relations
Department at 704-708-2858.
Participants in the
Solicitation
Dollar Tree, Family Dollar, and their respective directors,
executive officers and certain other members of management and
employees may be deemed to be participants in the solicitation of
proxies from the holders of Family Dollar common stock in respect
of the proposed merger between Dollar Tree and Family Dollar.
Information regarding the persons who may, under the rules of the
SEC, be considered participants in the solicitation of proxies in
favor of the proposed merger are set forth in the proxy
statement/prospectus filed with the SEC. You can also find
information about Dollar Tree’s and Family Dollar’s directors and
executive officers in their respective definitive proxy statements
filed with the SEC on May 12, 2014 and December 6, 2013,
respectively. You can obtain free copies of these documents from
Dollar Tree or Family Dollar using the contact information
above.
Forward Looking
Statements
Certain statements contained herein are “forward-looking
statements” that are subject to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. These
forward-looking statements and information about our current and
future prospects and our operations and financial results are based
on currently available information. Various risks, uncertainties
and other factors could cause actual future results and financial
performance to vary significantly from those anticipated in such
statements. For example, the unsolicited non-binding proposal from
Dollar General may not result in a definitive agreement for an
alternative business combination transaction. The forward looking
statements contained herein include assumptions about our
operations, such as cost controls and market conditions, and
certain plans, activities or events which we expect will or may
occur in the future and relate to, among other things, the business
combination transaction involving Dollar Tree and Family Dollar,
the unsolicited non-binding proposal from Dollar General for an
alternative business combination transaction, the financing of the
proposed transactions, the benefits, results, effects and timing of
the proposed transactions, future financial and operating results,
and the combined company’s plans, objectives, expectations
(financial or otherwise) and intentions.
Risks and uncertainties related to the proposed mergers include,
among others: the risk that Family Dollar’s stockholders do not
approve either merger; the risk that regulatory approvals required
for either merger are not obtained on the proposed terms and
schedule or are obtained subject to conditions that are not
anticipated; the risk that the financing required to fund either
transaction is not obtained; the risk that the other conditions to
the closing of either merger are not satisfied; potential adverse
reactions or changes to business or employee relationships,
including those resulting from the announcement or completion of
either merger; uncertainties as to the timing of either merger;
competitive responses to either proposed merger; response by
activist shareholders to either merger; costs and difficulties
related to the integration of Family Dollar’s business and
operations with Dollar Tree’s or Dollar General’s business and
operations; the inability to obtain, or delays in obtaining, the
cost savings and synergies contemplated by either merger;
uncertainty of the expected financial performance of the combined
company following completion of either proposed transaction; the
calculations of, and factors that may impact the calculations of,
the acquisition price in connection with either proposed
transaction and the allocation of such acquisition price to the net
assets acquired in accordance with applicable accounting rules and
methodologies; unexpected costs, charges or expenses resulting from
either merger; litigation relating to either merger; the outcome of
pending or potential litigation or governmental investigations; the
inability to retain key personnel; and any changes in general
economic and/or industry specific conditions. Consequently, all of
the forward-looking statements made by Family Dollar, in this and
in other documents or statements are qualified by factors, risks
and uncertainties, including, but not limited to, those set forth
under the headings titled “Cautionary Statement Regarding
Forward-Looking Statements” and “Risk Factors” in Family Dollar’s
Annual Report on Form 10-K for the fiscal year ended August 31,
2013, Family Dollar’s Quarterly Report on Form 10-Q for the quarter
ended May 31, 2014, and other reports filed by Family Dollar with
the SEC, which are available at the SEC’s website
http://www.sec.gov.
Please read our “Risk Factors” and other cautionary statements
contained in these filings. Readers are cautioned not to place
undue reliance on these forward-looking statements, which speak
only as of the date hereof. Family Dollar undertakes no obligation
to update or revise any forward-looking statements, even if
experience or future changes make it clear that projected results
expressed or implied in such statements will not be realized,
except as may be required by law. As a result of these risks and
others, actual results could vary significantly from those
anticipated herein, and our financial condition and results of
operations could be materially adversely affected.
About Family Dollar
For more than 54 years, Family Dollar has been providing value
and convenience to customers in easy-to-shop neighborhood
locations. Family Dollar’s mix of name brands and quality, private
brand merchandise appeals to shoppers in more than 8,100 stores in
rural and urban settings across 46 states. Helping families save on
the items they need with everyday low prices creates a strong bond
with customers, who often refer to their neighborhood store as “my
Family Dollar.” Headquartered in Matthews, North Carolina, just
outside of Charlotte, Family Dollar is a Fortune 300, publicly held
company with common stock traded on the New York Stock Exchange
under the symbol FDO. For more information, please visit
www.familydollar.com.
Family Dollar Stores, Inc.Investor Contact:Kiley F. Rawlins,
CFA, 704-708-2858krawlins@familydollar.comorMedia Contact:Joele
Frank, Wilkinson Brimmer KatcherMatthew Sherman,
212-355-4449orJamie Moser, 212-355-4449orAverell Withers,
212-355-4449