MKM Partners Thinks Dollar General Could Offer $83 Per Share For Family Dollar
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
|Feb 2015||JP Morgan||Reinstates||Overweight|
|Dec 2014||Citigroup||Initiates Coverage on||Buy|
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