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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
Aug 2016MacquarieMaintainsOutperform
Aug 2016UBSMaintainsBuy
Aug 2016BMO CapitalDowngradesOutperformMarket Perform

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Posted-In: Analyst Color News M&A Analyst Ratings

 

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