Dollar Tree expects to shed less than 300 stores to buy Family Dollar

Mon Jan 12, 2015 5:52pm EST
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By Ramkumar Iyer and Sruthi Ramakrishnan

(Reuters) - Discount chain Dollar Tree Inc (DLTR.O: Quote) said it expects to divest fewer than 300 stores to satisfy U.S. regulators scrutinizing its proposed takeover of Family Dollar Stores Inc FDO.N, and had already identified potential buyers.

Dollar Tree, which had 5,282 stores in the United States and Canada as of Nov. 1, said it would likely sign an agreement with the U.S. Federal Trade Commission by the end of the month on the number of stores it would have to give up.

Wal-Mart Stores Inc (WMT.N: Quote) and Target Corp (TGT.N: Quote) could be among potential buyers as they seek to expand their small-format stores, said Rahul Sharma, managing director of investment advisory firm Neev Capital.

Family Dollar has agreed to be bought by its smaller rival for $8.5 billion in cash and stock, rejecting a sweetened hostile $9.1 billion offer from Dollar General Corp (DG.N: Quote).

Family Dollar shareholders on Dec. 23 adjourned voting on the Dollar Tree offer, indicating interest in the higher offer despite its risk.

Family Dollar on Monday asked its shareholders to vote for the Dollar Tree offer at a Jan. 22 shareholder meeting.

"After two delays, we have been more than reasonable but have reached the end of our patience," Dollar Tree Chief Executive Bob Sasser said in a letter to Family Dollar.

Dollar General has said that it was willing to divest up to 1,500 stores to satisfy FTC concerns but Family Dollar said Monday that offer could fall short.   Continued...

A view of the sign outside the Dollar Tree store in Westminster, Colorado, February 26, 2014.   REUTERS/Rick Wilking