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Credit Suisse Sees Dollar General Acquisition of Family Dollar in $90-100/Share Range

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Shares of both Dollar General (NYSE: DG) and Family Dollar (NYSE: FDO) are outperforming the broader equities market Thursday morning as analysts are commenting on a likely deal.

Credit Suisse analyst Edward Kelly said the DG, FDO fusion makes "compelling strategic sense," and believes Dollar General could pay in the $90-100/share range for Family Dollar if FTC approval is granted. This $90-100/share range equates to a 30-40 percent premium above FDO's current share price of $72.23.

Kelly says the deal could create a dominate retailer through reduced competition and a move towards a more proactive (rather than reactive) management style. Kelly also sees potential cost and revenue synergies resulting from the acquisition.

Dollar General shares last traded at $54.50, up about 0.7 percent for the session. Shares of Family Dollar are up about 3.5 percent.

Latest Ratings for DG

DateFirmActionFromTo
Dec 2016Loop CapitalInitiates Coverage OnHold
Nov 2016JP MorganMaintainsNeutral
Oct 2016KeyBancInitiates Coverage OnSector Weight

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