Family Dollar Board of Directors Rejects Dollar Ge

Family Dollar Board of Directors Rejects Dollar General's Illusory Tender Offer


Dollar General's Conditional Tender Offer Cannot be Closed by its Own Terms
MATTHEWS, N.C., Sep 17, 2014 (BUSINESS WIRE) -- --Family Dollar Board Reaffirms Unanimous Recommendation in Support of Transaction with Dollar Tree
--Family Dollar Board Files Schedule 14D-9 with the Securities and Exchange Commission

Family Dollar Stores, Inc. (NYSE:FDO), a leading national discount retailer offering name brands and quality, private brand merchandise, announced today that its Board of Directors unanimously recommends that Family Dollar's shareholders reject the unsolicited conditional tender offer made by Dollar General Corporation (NYSE G) ("Dollar General Offer" or "Offer" and not tender their shares. In conjunction with its rejection of Dollar General's offer, Family Dollar's Board unanimously reaffirms its recommendation in support of the transaction with Dollar Tree, Inc. (NASDAQ: DLTR). The terms of the tender offer are the same as those in the proposal made by Dollar General on September 2, 2014, which the Board of Directors of Family Dollar unanimously rejected on September 5, 2014, on the basis of antitrust regulatory considerations.

Howard R. Levine, Chairman and CEO of Family Dollar, said, "Our Board of Directors, with the assistance of outside advisors and consultants, reviewed all aspects of Dollar General's tender offer and concluded unanimously that this highly conditional Offer is illusory because, as Dollar General is well aware, the Offer cannot close on the terms proposed. Tenders into the Dollar General Offer will be meaningless since there is no way that Dollar General can purchase shares that are tendered."

Mr. Levine added, "The terms of the Dollar General Offer are no different from those in its most recent unsolicited proposal, which was previously and unanimously rejected by our Board of Directors based on antitrust regulatory considerations. There is a very real and material risk that the transaction proposed by Dollar General would fail to close, after a lengthy and disruptive review process. Accordingly, our Board has rejected Dollar General's tender offer and reaffirmed its support of the transaction with Dollar Tree, 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."

Ed Garden, a Family Dollar director and co-founder and Chief Investment Officer at Trian Fund Management, L.P., a large shareholder of the Company, stated, "We are focused on delivering to Family Dollar shareholders the highest value with certainty, and the Dollar Tree transaction does just that. Dollar Tree has taken the antitrust risk off the table by committing to divest as many stores as necessary to obtain antitrust clearance. We remain fully committed to the Dollar Tree transaction."

Mr. Garden continued, "Rather than eliminating the antitrust risk for Family Dollar shareholders, Dollar General has commenced an illusory tender offer that simply cannot be closed by its own terms. Even the initial antitrust waiting period expires on October 10, 2014, after the expiration date for the Dollar General Offer. Furthermore, Dollar General has misrepresented that its tender offer was a prerequisite to making its HSR antitrust filing; Dollar General knows that it could have filed with antitrust regulators when it first submitted an unsolicited proposal nearly a month ago. As we have highlighted previously, Dollar General has repeatedly stated that antitrust is not a risk, yet they have put forth proposals that require Family Dollar shareholders to bear the ultimate risk. Receiving a reverse breakup fee with an after-tax value of less than $3 a share does virtually nothing to compensate the Family Dollar shareholders for assuming that risk. Accordingly, Family Dollar's Board unanimously rejects the Dollar General Offer and remains fully committed to the transaction with Dollar Tree."

The full basis for the Board's recommendation is set forth in Family Dollar's Schedule 14D-9 which has been filed with the Securities and Exchange Commission ("SEC" and is available on the SEC's website at www.sec.gov. Copies of the Schedule 14D-9 may also be obtained on the Company's website at www.FamilyDollar.com or by contacting MacKenzie Partners, Inc. toll free at 1-800-322-2885.

Morgan Stanley & Co. LLC is serving as exclusive financial advisor to Family Dollar and Cleary Gottlieb Steen & Hamilton LLP is serving as legal counsel.

Additional Information About the Dollar General Tender Offer

Family Dollar has filed a solicitation/recommendation statement with respect to the tender offer with the SEC. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE SOLICITATION/RECOMMENDATION STATEMENT WITH RESPECT TO THE TENDER OFFER AND OTHER RELEVANT DOCUMENTS THAT ARE FILED WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT THE TENDER OFFER. You will be able to obtain free copies of the solicitation/recommendation statement with respect to the tender offer and other documents filed with the SEC by Family Dollar through the website maintained by the SEC at http://www.sec.gov. Copies of the documents filed with the SEC by Family Dollar will be available free of charge on Family Dollar's internet website at www.FamilyDollar.com under the heading "Investor Relations" and then under the heading "SEC Filings" or by contacting Family Dollar's Investor Relations Department at 704-708-2858.