Dollar General Opens Sharply Lower; Deal Seen Less Likely

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Dollar General Corp.
DG
opened sharply lower Monday while analysts suggested a quick merger is unlikely. Dollar General said Friday that Chief Executive Rick Dreiling's will retire by May 2015, and Wall Street figures that means nothing will happen soon regarding a much hyped merger with Family Dollar Stores Inc.
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. After closing Friday at $61.72, Dollar General was trading recently at $56.56 off 1.1 percent. Family Dollar slipped nearly 2.7 percent Monday morning, trading at $65.05 early in the session.
Posted In: NewsM&A
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