Dollar General Opens Sharply Lower; Deal Seen As Less Likely
Dollar General (NYSE: DG) opened sharply lower Monday as analysts suggested a quick merger is unlikely.
Dollar General said Friday that Chief Executive Rick Dreiling will retire by May 2015, and Wall Street figures that means nothing will happen soon regarding a hyped merger with Family Dollar Stores (NYSE: FDO).
"The probability of a deal is much lower today,” Sterne Agee's Charles Grom reportedly said, adding that it would be a "strategic mistake" to replace Dreiling immediately before a major acquisition.
Brian Yarbrough of Edward Jones concurs, saying "they're not going to do a massive deal" at this point.
Activist investor Carl Icahn acquired a 9.4 percent stake in Dollar General earlier this month, demanding an immediate sale and threatening a proxy battle.
Dollar General has recovered since its sharp downturn, recently up 0.05 percent at $57.19.
Family Dollar slipped nearly 2.7 percent Monday morning, trading at $65.05 early in the session.
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