Market Overview

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

Share:
Related DG
Government Food Benefit Cuts Could Be Bigger Headwind For Dollar General Than Dollar Tree
Barclays Shrugs At Food & Staples Sector, Interest Piqued By Just 3 Names
Related FDO
Dollar Tree Is Now A Conviction List Buy At Goldman Sachs
Fred's New CEO Could Help The Company Clear A Lowered Bar In The Second Half Of The Year

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
Sep 2016BarclaysInitiates Coverage onEqual-weight
Sep 2016Wolfe ResearchDowngradesPeer PerformUnderperform
Sep 2016Goldman SachsAssumesNeutral

View More Analyst Ratings for DG
View the Latest Analyst Ratings

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

 

Related Articles (FDO + DG)

View Comments and Join the Discussion!