Dollar Tree Inc. (DLTR) said it will acquire Family Dollar
Stores Inc. (FDO) in a cash-and-stock deal that values the discount
retailer's shares about at $74.50 a piece.
The deal price, a roughly 23% premium over Family Dollar's
closing price on Friday, includes $59.60 in cash and $14.90
equivalent in Dollar Tree shares, the company said.
Family Dollar shares jumped 17% to $71.00 in recent premarket
trading.
The deal comes as activist investor Carl Icahn has been pushing
for a sale of Family Dollar, and threatening to replace the
discount retailer's board.
Family Dollar, with more than 8,100 stores across the country,
has been at a crossroads in its retail strategy. Early this year,
Chief Executive Howard Levine said the chain was shelving a
strategy that used price cuts on some items, while keeping others
elevated, and instead would emulate the everyday low price model
favored by rivals Dollar General Corp. (DG) and Wal-Mart Stores
Inc. (WMT).
Write to Anna Prior at anna.prior@wsj.com
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