Author: Chad Symens

September 5, 2014

Dollar Tree and Family Dollar have amended their merger agreement to include a commitment by Dollar Tree to divest as many stores as necessary or advisable to obtain antitrust clearance for the previously announced cash and stock transaction.

All other terms and conditions of the merger agreement remain the same as announced on July 28, 2014.  The two companies also said that their expectations for a closing date for the transaction have accelerated to as early as the end of November 2014.

News of the amended merger agreement coincided with Family Dollar’s rejection of Dollar General’s revised proposal made on September 2 on the basis of antitrust regulatory considerations.

Dollar Tree and Family Dollar expect the Federal Trade Commission to issue a second request for additional information on September 8, and said they are confident that regulatory approval will be obtained.

“Dollar Tree is committed to working hard to complete our acquisition of Family Dollar as quickly as possible.  Our amended agreement is clearly superior to Dollar General’s revised proposal based on antitrust risk, deal certainty and time value of money,” said Bob Sasser, Dollar Tree’s CEO.  “Unlike Dollar General, we expect to be required to divest few, if any, stores because our business model is significantly different from Family Dollar’s model.  Our product assortment and pricing is not driven by local competition, and we have very limited store overlap.  As evidence of our confidence in and commitment to closing this transaction without delay, we are amending our merger agreement to provide for a commitment to divest as many stores as necessary to obtain antitrust clearance.”

Under the terms of the agreement announced on July 28, Family Dollar shareholders will receive $59.60 in cash and $14.90 equivalent in Dollar Tree shares for each common share of Family Dollar owned, subject to a collar.  At closing, Family Dollar shareholders would own no less than 12.7% and no more than 15.1% of the outstanding common stock of Dollar Tree.

“Dollar Tree and Family Dollar continue to have productive discussions with the FTC,” added Sasser, “and despite the anticipated second request from the FTC, we remain confident in our ability to complete our transaction with Family Dollar by as early as the end of November 2014 and deliver expeditiously the closing certainty and substantial value that this transaction provides to both companies’ shareholders, customers and employees.  We will continue to work hard to complete our acquisition of Family Dollar as quickly as possible.”

Source: Retailing Today 

September 5, 2014

Family Dollar has rejected the revised proposal made by Dollar General on September 2 on the basis of antitrust regulatory considerations.  The Dollar General offer may be financially superior, the dollar store noted, but it’s not likely to pass muster with the Federal Trade Commission.

“Our board of directors, with the assistance of outside advisors and consultants, reviewed all aspects of Dollar General’s revised proposal and unanimously concluded that it is not reasonably likely to be completed on the terms proposed,” stated Howard Levine, chairman and CEO of Family Dollar.  “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 revised proposal 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.”

“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,” added Ed Garen, a Family Dollar director and co-founder and chief investment officer at Trian Fund Management.  “Dollar General’s revised proposal, on the other hand, does not eliminate regulatory risk for Family Dollar shareholders.  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.”

Family Dollar’s merger agreement with Dollar Tree contains a customary provision that permits Family Dollar to enter into discussions and share information with any competing bidder, but only if the board is able to determine that failure to do so would be inconsistent with its fiduciary duties and that the unsolicited, written proposal from the competing bidder would be reasonably expected to lead to a proposal that is not only financially superior, but also “reasonably likely to be completed on the terms proposed.”

Family Dollar contends that the FTC would take a more critical review of any proposed Dollar General/Family Dollar merger.

The Family Dollar Board’s unanimous determination to reject Dollar General’s revised proposal and to accept Dollar Tree’s commitment to divest as many stores as required for antitrust approval follows the unanimous recommendation of a committee of four non-management independent directors that has been overseeing the company’s consideration and exploration of strategic alternatives since January 2014.  This committee consists of Glenn Eisenberg, Ed Garden, George Mahoney, Jr. and Harvey Morgan.

Source: Retailing Today 

September 5, 2014

NRF calculated retail industry (excluding auots and gasoline) employment declined by 17,700 jobs in August, with significant downward revisions for July and June.  Loss leaders included food and beverage stores, which witnessed a 17,000 job loss, possibly suggesting a seasonal or category-specific anomaly.

“Employment figures for August were undoubtedly disappointing and lackluster,” NRF Chief Economist Jack Kleinhenz said.  “The weaker job growth in August presents a mixed picture of the economy compared to other positive indicators, including consumer confidence and average hourly earnings, which point to an improving economy.”

“Today’s jobs report calls into question how much momentum the economy will show in the second half of the year,” Kleinhenz said.  “The employment situation report just does not fit into the overall economic landscape.”

The U.S. Bureau of Labor Statistics Employment Situation Summary showed that total nonfarm payroll employment rose by only 142,000 in August.  The unemployment rate fell slightly to 6.1 percent and the civilian labor participation rate came in at 62.8 percent.

Source: National Retail Federation

September 3, 2014

• August posts strong increase following small loss in July
• Large gains for California, Michigan, Illinois and Florida

Online advertised vacancies gained 164,600 to 5,209,200 in August, according to The Conference Board Help Wanted OnLine (HWOL) Data Series released today.  The July Supply/Demand rate stands at 1.9 unemployed for each advertised vacancy with a total of 4.6 million more unemployed workers than the number of advertised vacancies.  The number of unemployed was 9.7 million in July.

“Labor demand has shown some renewed strength over the past three months with an average increase of 102,000 per month,” said Gad Levanon, Director of Macroeconomics and Labor Markets at The Conference Board.  “The 2014 gains through August are an improvement over the slower-paced gains of 2013 for the same period.”

In August the professional occupations continued to show improvements after earlier 2014 losses.  Gains included Business and Finance (10,700), Computer and Math (19,300), and Healthcare (24,200).  The Services/Production occupations also showed gains in Office and Administration (20,100), Sales (13,900), and Food Preparation (12,300).

August Changes for States

In August, online labor demand was up in 45 states and down in five states.  All four regions experienced gains.

The Midwest experienced the largest August gain, at 54,200.  The largest gain occurred in Michigan (15,200) to 174,900.  Illinois rose 12,500 to 213,900.  Wisconsin (+6,300 to 112,400), Ohio (+4,400 to 181,700), Missouri (+2,600 to 84,500), and Minnesota (+1,900 to 125,500) also saw improvement.  Among the smaller states in the region, Indiana rose 5,800 to 90,200; Iowa rose 2,900 to 62,500, and Kansas rose 1,000 to 47,400.  North Dakota and South Dakota inched up with gains of 500 and 200 respectively.

The South grew by 47,800 in August.  By far the largest gain among larger states in the region was Florida’s increase of 11,900 to 273,000.  Texas gained 7,400 to 400,400, followed by Virginia (+5,000 to 150,400), North Carolina (+4,100 to 132,700), Georgia (+3,300 to 148,700), and Maryland (+1,900 to 105,100).  Among the smaller states, South Carolina was up 3,300 to 67,800 and Kentucky rose 1,900 to 51,400.  Alabama and Mississippi were up 800 and 600 respectively, while West Virginia fell 500.

The West experienced a gain of 47,700, led by a spike of 32,300 in California to 579,200.  Colorado (+7,600 to 130,500) and Arizona (+4,300 to 99,400) also saw gains, while Washington fell 400 to 127,200.  Among the smaller states in the West, Oregon (+4,800 to 73,000) led gains, followed by Idaho (+1,900 to 25,600) and Hawaii (+900 to 21,000).  New Mexico saw a slight gain of 800 while Utah dropped 1,500 and Alaska fell 600.

The Northeast rose 12,900, reflecting gains in Massachusetts (+7,900 to 157,300), New Jersey (+6,700 to 147,600) and New York (+5,100 to 308,600).  Pennsylvania dropped 16,100 to 202,200.  In the smaller states, Connecticut gained 2,200 to 72,900; New Hampshire gained 1,700 to 31,200; and Rhode Island gained 1,000 to 21,200.  Maine and Vermont were both up slightly by 500.

Metro Area Highlights

• In August, among the 20 largest metro areas, two (Houston and Philadelphia) declined, 17 gained, and one (Cleveland) remained constant
• Of the 52 metro areas for which Help Wanted Online provides monthly data, 46 gained advertisements, four (including Pittsburgh and Salt Lake City)lost, and 2 (Cleveland and Buffalo) remained constant

Occupational Highlights

• In August all of the 10 largest online job categories posted gains

Source: The Conference Board

September 3, 2014

CVS Caremark is changing its corporate name to CVS Health to reflect its broader health care commitment and its expertise in driving the innovations needed to shape the future of health.

“For our patients and customers, health is everything and CVS Health is changing the way health care is delivered to increase access, lower costs and improve quality,” announced Larry J. Merlo, President and CEO, CVS Health.  “As a pharmacy innovation company at the forefront of a changing health care landscape, we are delivering breakthrough products and services, from advising on prescriptions to helping manage chronic and specialty conditions.”

CVS Health includes the company’s retail business, which continues to be called CVS/pharmacy; its pharmacy benefit management business, which is known as CVS/caremark; its walk-in medical clinics, CVS/minuteclinic; and its growing specialty pharmacy services, CVS/specialty.  With 7,700 retail pharmacies, 900 walk-in medical clinics, a leading pharmacy benefits manager with nearly 65 million plan members, and expanding specialty pharmacy services, CVS Health enables people, businesses and communities to manage health in more affordable, effective ways.

As a further demonstration of its commitment to health, CVS Health also announced the end of tobacco sales at CVS/pharmacy as of September 3, nearly a month ahead of the previously targeted date of October 1.  In February, the company announced that it would end the sale of cigarettes and tobacco products at its CVS/pharmacy stores, making CVS/pharmacy the first and only national pharmacy chain to take this step in support of the health and well-being of its patients and customers.

“Along with the start of CVS Health, the sale of cigarettes and tobacco products at CVS/pharmacy ends today.  By eliminating cigarettes and tobacco products from sale in our stores, we can make a difference in the health of all Americans,” Merlo declared.

“Today, as CVS Health, we are tobacco-free, reinventing pharmacy and taking our place among leaders in the health care community,” Merlo concluded.

Source: Retailing Today 

September 2, 2014

Fred’s second quarter results reflected the company’s strategic decision to build its business model for the future as a convenience/pharmacy-centric store, driven by data-based inventory management, according to CEO Bruce Efird.

The company reported a net loss of $16.4 million for the quarter.  Fred’s total sales for the second quarter of fiscal 2014 increased 2% to $491.2 million.  On a comparable-store basis, second quarter sales decreased 0.1%.

The dynamic challenges the company faced surfaced in fourth quarter 2013 throughout its general merchandise and pharmacy departments.  Customer trips came under pressure from what Efird referred to as “Internet intrusion,” while generic drug price inflation ramped up faster than the company’s payer increases were occurring.  Although its second quarter results were disappointing, Efird pointed to several key wins.

“We saw improvement in general merchandise sales and customer traffic from our new marketing program, which indicates positive traction for the future,” he said.  “In pharmacy, we completed the prime vendor agreement that has substantial benefits to all aspects of our pharmacy operations and our specialty division, with components needed to support our accelerated investment in pharmacy acquisitions.”

In January, the company took a look at its processes and concluded that retail would not continue with business as usual and changes would have to take place.

“From this thinking came key changes that will drive the transformation of the stores to a convenience/pharmacy-centric store, which began in the second quarter,” Efird explained.

Those changes included an acceleration of pharmacy acquisitions that will help Fred’s achieve a target of reaching a 65% to 70% penetration rate of stores with a pharmacy.  Fred’s derived 40.4% of its sales from pharmaceuticals in the second quarter, compared with 36.4% for the same period a year ago.

Changes also included a new marketing plan, directed at driving customer traffic through multiple avenues, including expanded ad circulars and in-store programs.

The company has been using data-driven inventory and category-management tools and metrics, as well as processing changes to distribution and store procedures to get inventory directly from the truck to the store floor in the same day.  It also plans on closing 60 stores that do not fit the thresholds of the convenience/pharmacy-centric store model, allowing a reallocation of capital.

Fred’s also expanded its leadership.  It named Jerry Colley as EVP Store Operations; Ken Donahue as SVP and Chief Information Officer; Craig Barnes as SVP Global Sourcing and Hardlines Merchandising responsibility; and Kelly Ma as VP International and Domestic Sourcing.

Source: Retailing Today 

September 2, 2014

Serious labor shortages in the world’s advanced economies will create unprecedented challenges for business leaders and policymakers over the next fifteen years and beyond, according to a comprehensive new report released today by The Conference Board.  From Not Enough Jobs to Not Enough Workers forecasts the impact of aging populations to compound rapidly as increasing numbers of baby boomers depart workforces.  It draws on first-of-its-kind analysis of the relative risk of shortages in myriad individual labor markets, including 32 national economies, 266 industries and 464 occupations in the United States, and 40 occupations in Europe.

“Mature economies are facing a historical turning point: for the first time since World War II, working-age populations are declining,” said Gad Levanon, Director of Macroeconomic Research at The Conference Board and a co-author of the report.  “The global financial crisis and its aftermath – stubbornly high unemployment in many countries – have postponed the onset of this demographic transformation, but will not prevent it from taking hold.  Companies in the U.S., Europe, and elsewhere must begin planning now for an environment in which difficulties recruiting and retaining workers will make it significantly harder to control labor costs without losing labor quality.”

Jobs – Now Hard to Find, Soon Hard to Fill

In examining likely labor market trends in dozens of advanced economies, the report draws particular distinction between short-term outlooks – which reflect the continued impact of the Great Recession on various countries – and long-term forecasts rooted in demographic fundamentals.  Indeed, while current labor markets in mature economies are not particularly tight overall – wage growth and labor turnover both remain below prerecession levels – this aggregate picture conceals huge variation between countries, with rapid reversal from labor surplus to shortage in many.

The growing labor market tightness can be traced in the gap between current unemployment and the estimated natural rate of unemployment.  Already, Canada, Germany, Japan, and South Korea have reversed any effects of the recession and fallen below their natural rate of unemployment.  The United States and United Kingdom are likely to follow in 2014-15, while countries like Australia, Sweden, Belgium, and Denmark will cross the threshold by 2016-17.  The hardest hit European economies – Greece, Spain, Italy, and Portugal – as well as France will likely retain slack labor markets for longer, with natural rates of unemployment unlikely to be reached until after 2018.

To determine long term trends, From Not Enough Jobs to Not Enough Workers introduces a Labor Shortage Index which combines current labor market tightness with future demographic developments factors to predict the likelihood of countries experiencing labor shortages in 2025:

• Germany faces the largest risk of labor shortages among 32 countries compared, based on negative projected labor force growth and an unemployment rate already below the natural level.  Germany’s highly integrated Central European neighbors – including Hungare, Poland, Austria, Slovakia, and the Czech-Republic – face risks nearly as high.
• Despite the severity of the economic crisis in Mediterranean countries, they may in fact see labor shortages by 2025.  With minimal productivity growth and a large working-age population decline projected, Italy is at particularly high risk.
• The Asia-Pacific picture is mixed.  Already experiencing one of the world’s tightest labor markets, Japan faces similar demographic pressures as Germany in the decade ahead.  High productivity growth should moderate the risk in South Korea.
• The risk of labor shortages in the United States will be moderate in a global context, as its working-age population grows minimally – but faster than most mature economies due to immigration.  Risks in the U.K., France, and Canada will be broadly comparable to the U.S.

Ground Zeroes for the Looming Labor Shortage

Drilling deeper into country-wide data, the Future Occupational Labor Shortage Index introduced in the report identifies the industries most likely to face a scarcity of qualified talent over the next decade.  The interaction of two factors – the speed of employment growth and the net number of new job market entrants (or departures) – determines the level of risk for any particular occupation.

Occupational data from the United States indicates that future labor shortages will cluster around three major categories of concern:

• Health-related occupations.  The same aging of the U.S. population that will curtail working-age population growth to as low as 0.15 percent by 2030 is also driving up demand for medical workers.  At the same time, high education and experience requirements limit entry into the job market.  The result is a dearth in many healthcare professions, including occupational therapy assistants, physical therapists and therapist assistants, nurse practitioners and midwives, and dental hygienists.  Among doctors, optometrists and podiatrists are the specialists most at risk of shortage, with the general physicians and surgeons category not far behind.
• Skilled labor occupations.  These jobs typically require more than a high school education, but not a bachelor’s degree.  Unlike healthcare, the primary driver of shortages here is not increased demand – employment growth is expected to be low in the coming decade – but instead a rapidly shrinking supply of young people entering these fields as increasing numbers retire.  Skilled labor occupations most at risk include water and wastewater treatment plant and system operators, crane and tower operators, transportation inspectors, and construction inspectors.
• STEM occupations.  U.S. ploicymakers have long been concerned about shortages in science, technology, engineering, and mathematics, but many of these fields rank surprisingly average in a national context.  Moderating the risk of shortages is the relatively high number of young entrants compared to baby-boomer retirees, as well as the large proportion of new immigrants in STEM jobs.  Moreover, strong productivity growth means that output will continue to expand in areas like information technology, telecommunications, and high-tech manufacturing even as workforces in these jobs are expected to shrink.  Nevertheless, certain STEM fields – including mathematical science, information security, and civil, environmental, biomedical, and agricultural engineering – do face significant shortages.

“Our extensive database of occupational data points to the U.S. industries most at risk of labor shortages,” said Levanon.  “Topping the list are: healthcare, including hospitals and nursing facilities; transportation industries, including ground passenger, water, and rail transport; utilities; social assistance; and mining and construction.”

“European occupational and industry data reveal a similar profile of risks, with social services, health professions, and medium-skilled trade occupations facing impending labor shortages,” said Bert Colijn, Senior Economist, Europe at The Conference Board and a co-author of the report.  “STEM jobs will also see higher pressures than in the U.S., while the low-skilled occupations that form the crux of the current unemployment crisis in much of Europe are unlikely to see higher demand.  This puts the onus on governments, education systems, and business to retrain workforces in the decade ahead.”

Source: The Conference Board

August 31, 2014

Improved merchandising strategies and marketing execution at Big Lots has president and CEO David Campisi feeling good about prospects for a company that continues to distance itself from its closeout roots.

Big Lots produced a 1.7% same store sales increase during its second quarter ended August 2 and generated earnings per share of 31 cents, a penny higher than the company’s forecast range of 24 cents to 30 cents.  Total sales increased 1.2% to $1.2 billion.  Profits from continuing operations declined to $17.2 million from $21.5 million and earnings per share of 31 cents were also below the prior year’s 37 cents.  Profits suffered as expenses increased 34.5% of second quarter sales compared to 33.9% in the second quarter the prior year.  Gross margins were flat at 39.3%.  Inventories at U.S. stores declined by 6%.

The top line performance was modest and the better than expected profits were below the prior year, but Campisi said he was very pleased with the results with five of the company’s seven merchandise categories posting positive comps.

“For the second consecutive quarter, our comps were positive and comfortable within the guidance range we provided, and our earnings were above the high end of our range.  We believe this is an indication that our core customer is responding to our improved merchandising strategies and marketing execution.”

Those strategies include a shift toward cleaner, more orderly merchandised stores with a reliably available assortment of products in categories such as food and consumables where leading national brands are available.  The company expects to have freezers and coolers in roughly half of its stores by the holidays and is also enjoying success with the furniture category where it offers financing.

It’s all part of an effort to distance itself from the negative image the company had created for itself as a retailer who sold closeout merchandise in cluttered stores.  In fact, in a subtle shift evident in the second quarter, Big Lots now describes its 1,495 store operation as a “unique, non-traditional, discount retailer,” whereas it had previously characterized itself as “America’s largest broadline closeout retailer.”

The result of the changes is more suppliers of branded merchandise are interested in doing business with the company and tapping into the growth potential of its nearly 1,500 stores.  According to CFO Tim Johnson, the company has streamlined its supplier base and is attracting more interest from major suppliers who are no longer embarrassed to see their products in Big Lots stores.

Source: Retailing Today

September 2, 2014

New Orders, Employment and Production Growing; Inventories Growing; Supplier Deliveries Slowing

Economic activity in the manufacturing sector expanded in August for the 15th consecutive month, and the overall economy grew for the 63rd consecutive month, say the nation’s supply executives in the latest Manufacturing ISM Report on Business.

The report was issued today by Bradley J. Holcomb, CPSM, CPSD, chair of the Institute for Supply Management (ISM) Manufacturing Business Survey Committee.  “The August PMI registered 59 percent, an increase of 1.9 percentage points from July’s reading of 57.1 percent, indicating continued expansion in manufacturing.  This month’s PMI reflects the highest reading since March 2011 when the index registered 59.1 percent.  The New Orders Index registered 66.7 percent, an increase of 3.3 percentage points from the 63.4 percent reading in July, indicating growth in new orders for the 15th consecutive month.  The Production Index registered 64.5 percent, 3.3 percentage points above the July reading of 61.2 percent.  The Employment Index grew for the 14th consecutive month, registering 58.1 percent, a slight decrease of 0.1 percentage point below the July reading of 58.2 percent.  Inventories of raw materials registered 52 percent, an increase of 3.5 percentage points from the July reading of 48.5 percent, indicating growth in inventories following one month of contraction.  The August PMI is led by the highest recorded New Orders Index since April 2004 when it registered 67.1 percent.  At the same time, comments from the panel reflect a positive outlook mixed with caution over global geopolitical unrest.”

Manufacturing expanded in August as the PMI registered 59 percent, an increase of 1.9 percentage points when compared to July’s reading of 57.1 percent.  August’s PMI reading of 59 percent is the highest reading since March 2011 when the PMI registered 59.1 percent.  A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting.

A PMI in excess of 43.2 percent, over a period of time, generally indicates an expansion of the overall economy.  Therefore, the August PMI indicates growth for the 63rd consecutive month in the overall economy, and indicates expansion in the manufacturing sector for the 15th consecutive month.  Holcomb stated, “The past relationship between the PMI and the overall economy indicates that the average PMI for January through August (55 percent) corresponds to a 3.9 percent increase in real gross domestic product (GDP) on an annualized basis.  In addition, if the PMI for August (59 percent) is annualized, it corresponds to a 5.2 percent increase in real GDP annually.”

Of the 18 manufacturing industries, 17 are reporting growth in August.

Source: Institute for Supply Management 

September 2, 2014

The Family Dollar board is under new pressure to walk away from a deal with Dollar Tree after Dollar General further increased an already more generous counter offer.

Early Monday Dollar General increased its all cash offer to $80 a share from $78.50 a share and increased the number of stores it said it would be willing to divest to 1,500 from 700.  The company also said it would be willing to pay Family Dollar a $500 million reverse break-up if the deal failed to secure antitrust clearance.

Family Dollar already has an acquisition in place with Dollar Tree for $74.50 a share, consisting of $59.60 in cash and $14.90 in Dollar Tree shares.  While Dollar General’s initial proposal was richer and all cash, concerns surfaced that regulqtory approval could be an issue even though Dollar General indicated it would divest up to 700 locations.

“We are confident that our enhanced proposal sufficiently addresses any concerns that led Family Dollar’s board of directors to reject our prior proposal without any discussions between our companies,” said Rick Dreiling, Dollar General’s chairman and CEO.  “Even as a secondary antitrust review supported our previous proposal, we revised our offer to demonstrate the seriousness of our commitment.  Our revised proposal provides Family Dollar shareholders with significantly increased value over the existing agreement with Dollar Tree, as well as immediate and certain liquidity for their shares.  If the Family Dollar board fails to seize this opportunity to maximize value for its shareholders, we will consider taking our superior proposal directly to the Family Dollar shareholders.”

Dollar General believed its earlier 700 store divestiture commitment would have been sufficient to clear any review by the Federal Trade Commission and suggested those analyzing the deal on behalf of Family Dollar are using a flawed methodology.

“Perhaps Family Dollar’s advisors are analyzing this transaction as if it were a potential grocery store merger or utilizing data that tells a story much different than Dollar General’s documents and data,” according to a Dollar General statement.  “Dollar General is confident that this matter would not be evaluated as traditional grocery store merger and that, as the acquirer, Dollar General’s documents and data would be more important to the FTC in its analysis than those of Family Dollar.”

Those documents indicate that Dollar General is more concerned about competition from Walmart than Family Dollar and it makes pricing decisions accordingly.

In a letter to the Family Dollar board, Dreiling expressed disappointment that the Dollar General’s earlier bid was rejected without any conversations but said the company was committed to the deal.  The company took the added measure of engaging Richard Feinstein of Boies, Schiller & Flexner to independently review the company’s earlier antitrust analysis.  Feinstein led the FTCS Bureau of Competition until 2013 and determined the deal can be completed on the company’s initial terms.

“We look forward to the time when our companies and their advisors are able to disucss these matters more openly with one another once you have taken the appropriate steps under your existing merger agreement to allow that to happen,” Dreiling said.  “Only by engaging with us can you ensure that you have fulfilled your duty to your shareholders to be well-informed and that you have acted in the best interests of your shareholders to maximize the value of their shares.”

Source: Retailing Today