Family Dollar stockholders approve Dollar Tree transaction
MATTHEWS, N.C. — Family Dollar Stores on Thursday announced that, based on a preliminary count of the votes cast at the company’s special meeting of stockholders held today, Family Dollar stockholders voted to approve the proposed merger with Dollar Tree.
Based on the preliminary count, approximately 84 million shares were voted in favor of the merger proposal. The favorable vote represents 74% of the total outstanding and 89% of the total shares voted. As of Oct. 30, 2014, the record date for the special meeting, there were approximately 114 million shares of Family Dollar common stock outstanding.
“We are pleased with the outcome of today’s vote, and I want to thank Family Dollar stockholders for their support throughout this process,” stated Howard Levine, chairman and CEO of Family Dollar. “The Family Dollar board of directors and management team have worked diligently to advance the best interests of all of the company's stockholders, and we are grateful for the support we received for the merger proposal. We are also very appreciative of Family Dollar’s talented and committed team members, who have remained focused on serving our customers throughout this process. We look forward to completing the transaction with Dollar Tree and remain excited about the opportunity that this combination will create for our stockholders, team members, customers and other stakeholders.”
Post-acquisition, the combined entity will command sales of $18.4 billion with more than 13,000 locations under a number of formats, including Family Dollar (8,101 locations as of Nov. 29) and Dollar Tree (5,282 locations as of Nov. 20, including stores operating under the multi-pricepoint operator Deal$ and Dollar Tree Canada). The combined selling area will exceed 103.5 million square feet. As much as 35% of the combined entity will be operating on a fixed-price point strategy, with the remaining 65% pursuing a multi-pricepoint strategy.
Half of all Dollar Tree sales come from the consumables category, with private label penetration ranging between 35% and 40%. Almost three-quarters of Family Dollar sales are made up of consumables, with the balance coming from home products (10%), seasonal and electronics (10%) and apparel and accessories (8%). Family Dollar's private label penetration is 26%.
The proposed merger remains subject to approval by the Federal Trade Commission. As previously announced, Dollar Tree and Family Dollar have agreed to provide the FTC with four weeks’ notice prior to closing. Dollar Tree expects to initiate this four-week notice period (which may be terminated early by the FTC) after it has executed a consent decree with the FTC's Bureau of Competition, which would permit FTC clearance and the closing of the merger as soon as March 2015.
The independent Inspector of Elections, IVS Associates, will tabulate all proxies and ballots submitted at the special meeting. Final results will be released after the votes have been tabulated and certified, which Family Dollar expects to occur next week.