
While Dollar General ratchets up its fight for a hostile takeover of Family Dollar, it recently launched its own effort to solicit shareholders to vote against the acquisition by a third party, Dollar Tree for Family Dollar. Investors may have cooled slightly, but only slightly, in the squabble. Both Dollar General and Family Dollar stores continue selling almost as fast as they can be built.
The Dollar General store at 3751 S Pantano Road in Tucson sold to a Flagstaff-based investor (James Spencer), Golden Aspen Investments, for $2.03 million ($223 PSF). The seller was DG Pantano & Esclante of Salt Lake City, UT. The 9,100-square-foot building (built 2013) on one-acre sold at a 6% cap and 10+ year lease term on this net investment.
Chris Sands and Elan Sieder of Sands Investment Group in Santa Monica, CA handled the transaction. The firm specializes in net retail investment sales.
A few days earlier, a Family Dollar store at 2820 W Los Reales Road in Tucson was sold by builder, Tombo51, LLC (Chris Lechner) of Tucson for $1.425 million ($171 PSF). The 8,320-square-foot building (built 2013) on just under one-acre was sold with similar lease terms without brokers involved this time.
The solicitation, filed Friday with the Securities and Exchange Commission, comes on top of Dollar General’s hostile bid to buy Family Dollar for $80 a share. The discount retailer has rejected Dollar General three times in the last month, as the Family Dollar board of directors seeks instead to have the company be acquired by Dollar Tree.
“We believe our $80.00 per share all-cash offer is a superior alternative for the Family Dollar stockholders because it provides greater financial value than the proposed Dollar Tree merger,” Dollar General wrote in its message to shareholders.
Family Dollar agreed in July to be acquired by Dollar Tree for $74.50 worth of cash and stock. Although the overall offer is about $640 million less than Dollar General’s $9.1 billion hostile bid, Family Dollar’s board has said the Dollar General deal is sure to be blocked by federal regulators due to antitrust concerns.
The Dollar Tree deal, according to Family Dollar’s board, is more likely to be approved by the Federal Trade Commission. But Dollar General insists the antitrust concerns are a smokescreen, and that regulators would approve a deal with Family Dollar.
Dollar General’s tactic is similar to that of two Brazilian firms that are trying to buy Charlotte-based Chiquita Brands International and break up the banana company’s planned merger with Irish-based Fyffes. The companies, Cutrale and Safra, solicited votes from Chiquita shareholders in advance of that company’s meeting to approve the Fyffes deal.
Cutrale and Safra forced a postponement of Chiquita’s meeting, which had been scheduled for this week. After influential shareholder advisory firms threw their support behind Cutrale and Safra, the Brazilian firms also got Chiquita to open its books and start negotiations.
In a statement, Family Dollar said the company’s board still strongly supports the Dollar Tree deal, “which delivers attractive value in the form of immediate upfront cash and upside participation in a combined Dollar Tree-Family Dollar entity, as well as closing certainty.”
Family Dollar shareholders must still vote on any deal and a date for any such special meeting has not been set.
To learn more Sands can be reached at 310.498.8200 and Sieder is at 818.633.9377.