No new agreements for US public company acquisitions with a deal value of $100 million or more were filed this past week.

From the realm of hostile M&A, on August 18, 2014, Dollar General Corporation made an unsolicited bid to acquire Family Dollar Stores, Inc. for $78.50 per share in cash, or a $9.7 billion enterprise value ($8.9 billion equity value). Family Dollar is currently party to an agreement to be acquired by Dollar Tree, Inc. for $9.2 billion in cash and stock ($8.5 billion equity value). If Family Dollar were to accept Dollar General's offer, it would have to pay Dollar Tree a break-up fee of $305 million (3.32% of the enterprise value; 3.59% of the equity value), which Dollar General has committed to finance over and above its $78.50 per share bid. Dollar General also disclosed a letter written to the board of Family Dollar in which it takes issue with Family Dollar's description of the background to the Dollar Tree agreement and implies that personal motivations led Family Dollar to agree to an inferior deal with Dollar Tree.

However, on August 21, 2014, the board of directors of Family Dollar rejected Dollar General's proposal on the basis of antitrust regulatory considerations, stating that the bid is not "reasonably likely to be completed on the terms proposed," and reaffirmed its recommendation of the merger with Dollar Tree. Although Dollar General had disclosed that it would be prepared to divest up to 700 retail stores to obtain antitrust approval (approximately the same percentage of stores represented by the 500-store divestiture commitment in the Dollar Tree merger agreement), Family Dollar's board did not consider this commitment adequate to "eliminate regulatory risk for Family Dollar shareholders." Notably, Dollar General had made no mention of any willingness to pay a reverse break-up fee for antitrust failure and committed only to sign a merger agreement "substantially similar" to the agreement with Dollar Tree, which does not contain such a fee.

To access all summaries in our Public Merger Agreements database, see What's Market.