Delaware Court Denies Request to Block Family Dollar Shareholder Vote

A Delaware Chancery Court judge has denied a request to block shareholders from voting on Family Dollar Stores’ proposed sale to Dollar Tree, saying stockholders should have the “opportunity to decide for themselves” on the transaction.

A shareholder lawsuit had requested a preliminary injunction against the vote until the North Carolina-based retailer “properly engaged” in discussions with rival Dollar General to “achieve a value-maximizing transaction.” Delaware Chancery Court Judge Andre Bouchard issued his opinion on Friday, Family Dollar said in a securities filing Monday.

Family Dollar is trying to be acquired by Virginia-based Dollar Tree for $8.5 billion in cash and stock, even as it fends off a hostile, $9.1 billion all-cash bid by Tennessee-based rival Dollar General. Shareholders are scheduled to vote on the Dollar Tree deal on Tuesday.

Tuesday’s vote, to be held in Charlotte, would give Family Dollar shareholders the chance to approve or reject Dollar Tree’s offer. Family Dollar’s website lists the meeting on its calendar of events. But analysts have suggested the meeting could be delayed if the Federal Trade Commission hasn’t yet said whether it would allow or block Dollar General’s bid on antitrust concerns.

The Family Dollar takeover saga started in July, when Dollar Tree announced a plan to buy Family Dollar for $74.50 worth of cash and stock per share. Dollar General swooped in, however, with its own hostile, all-cash bid of $80 a share.

Family Dollar’s board rejected Dollar General despite the higher amount, claiming regulators would either block such a deal because of antitrust concerns or require crippling store divestitures. That made the Dollar Tree deal more attractive, Family Dollar said, because it was likely to easily win federal approval.

This article appeared in print in the December 23rd, 2014 edition of Hamodia.