Family Dollar Stores, Inc. (NYSE:FDO) is the target of a price war unfolding between Dollar General Corp. (NYSE:DG) and Dollar Tree, Inc (NASDAQ:DLTR). Just a few weeks ago, Dollar Tree, Inc (NASDAQ:DLTR) had made a bid to acquire Family Dollar Stores, Inc. (NYSE:FDO) at $74.50, which had surprised the street as most people were expecting the bigger rival, Dollar General Corp. (NYSE:DG) to make a bid. It seems Dollar General Corp. (NYSE:DG) has finally woken up to the fact that Family Dollar Stores, Inc. (NYSE:FDO) and Dollar Tree, Inc (NASDAQ:DLTR) as a combined entity would pose a serious threat to its business and has made a counter bid for Family Dollar Stores, Inc. (NYSE:FDO) at $78.50 a share.
Jim Cramer discussed today on CNBC the offer of Dollar General Corp. (NYSE:DG) to buy Family Dollar Stores, Inc. (NYSE:FDO) in a deal valued at $9.7 billion.
“We were surprised that Dollar General Corp. (NYSE:DG) was not involved, in part because it is probably a better fit and you can tell from the stock’s reaction, people totally agree with that and I like an all cash bid, there is a lot of overlapping these two. So, you will be able to take out a lot more costs, that’s what we like about takeovers, we like consolidation, we like costs taken out. This one has that,” Cramer said.
Though it is believed that Carl Icahn, the billionaire hedge fund manager has been influential in pushing Family Dollar Stores, Inc. (NYSE:FDO) to be sold, the company had recently revealed that it was looking for suitors well before Icahn acquired shares of the company and made his views public. Icahn on his part believed that Dollar General Corp. (NYSE:DG) was a much better choice for Family Dollar Stores, Inc. (NYSE:FDO) to get acquired by, instead of Dollar Tree, Inc (NASDAQ:DLTR) and wasn’t too pleased when Dollar Tree, Inc (NASDAQ:DLTR) had announced its takeover of Family Dollar Stores, Inc. (NYSE:FDO).
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