Report: Family Dollar May Attract Counterbid From Dollar General

Dollar General Corp. DG may seek to top the recent $8.5 billion offer on Family Dollar FDO from Dollar Tree Inc. (NYSE DLTR), according to a news report Monday. The possible bidding skirmish, reported by Bloomberg, comes about a week after the boards of both Family Dollar and Dollar Tree approved the $74.50 per share merger plan. Dollar General has hired an adviser to evaluate a possible counter bid which could be paid for with bank financing, according to unnamed sources cited by Bloomberg, who put the chances of a new offer at 50 percent. Analysts have suggested that a merger of Family Dollar and Dollar Tree would put Dollar General at risk of an unwanted takeover. Other potential counter-bids for Family Dollar are seen as at least feasible coming from Wal-Mart Stores Inc, WMT and Target Co. TGT, although neither have expressed interest. Dollar General changed hands recently up 3 percent at $57.65; Family Dollar was up 2.6 percent at $77.72; Dollar Tree was down 1.5 percent to $55.14.