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MKM Partners Thinks Dollar General Could Offer $83 Per Share For Family Dollar

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Dollar General (NYSE: DG) could make a further offer as high as $83 per share for Family Dollar (NYSE: FDO), an analyst said Tuesday.

MKM's Patrick McKeever said Dollar General can afford to pay "in the mid $80s" for Family Dollar and still make a compelling strategic case for the deal.

Family Dollar traded Tuesday up 0.5 percent at $80.21 per share.

McKeever said competing suitor Dollar Tree (NASDAQ: DLTR) can only afford to offer $78 to $79 per share and that such an offer will be soon forthcoming.

Dollar Tree will then try to sell its lower bid on the supposedly lower risk of violating anti-trust rules, McKeever said in a note.

McKeever maintained a Buy rating and $75 target on Dollar General.

Dollar General's latest bid adds $1.50 per share to its August 18 bid of $78.50. Dollar Tree has offered $74.50 per share, which Family Dollar has accepted, citing anti-trust concerns.

But Dollar General said Tuesday it would wage a proxy battle for shareholder support if Family Dollar refused its latest offer.

Latest Ratings for DG

DateFirmActionFromTo
Apr 2015Deutsche BankMaintainsBuy
Mar 2015JefferiesMaintainsBuy
Feb 2015JP MorganReinstatesOverweight

View More Analyst Ratings for DG
View the Latest Analyst Ratings

Posted-In: MKM Partners Patrick McKeeverAnalyst Color News Rumors Reiteration M&A Analyst Ratings

 

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