Family Dollar shareholders voted this week to approve a takeover bid by rival Dollar Tree even though Dollar General had a higher competing offer, The Associated Press reported.
The deal with Dollar Tree still needs to be approved by the Federal Trade Commission, but Family Dollar expects it to close by March.
Dollar Tree first offered to buy Matthews, North Carolina-based Family Dollar in July for about $8.5 billion. Dollar General offered higher bids that were repeatedly rejected. Dollar General's pursuit of Family Dollar is now likely finished. It said in a statement that the vote was a loss for Family Dollar shareholders and shoppers, who would have benefited from lower prices in its stores.
"Family Dollar's lack of engagement and a contracted transaction timeline ultimately prevented us from completing this transaction," said Dollar General's CEO Rick Dreiling.
Dollar General's most recent bid for Family Dollar was about $9.1 billion. Family Dollar said it rejected Dollar General's bids because it expected that it would be harder to get regulatory approval for the deal even though Dollar General was willing to sell as many as 1,500 stores.
A combination of Family Dollar and Chesapeake, Virginia-based Dollar Tree will create the largest dollar store company in the nation, with more than 13,000 stores. Dollar General, based in Goodlettsville, Tennessee, has more than 11,000 stores.
Shares of all three companies rose in midday Thursday. Family Dollar Stores Inc. rose 93 cents, or 1.2 percent, to $76.48. Dollar Tree Inc. added $2.40, 3.5 percent, $70.21. Dollar General Corp. rose $2.38, or 3.5 percent, to $69.59.
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