(Corrects paragraph 6 to say Levine will remain CEO of Family
Dollar, not become CEO of the combined company. Also corrects to
say Levine is expected to lose his job, not that he will)
Aug 21 Dollar General Corp questioned
whether Family Dollar Stores Inc Chief Executive Howard
Levine was being driven by self-interest in his support of a
proposed takeover of his company by Dollar Tree Inc.
Dollar General, which has made its own offer to buy Family
Dollar, also alleged it had been led astray by Levine in talks
on a potential buyout, notably during a meeting on June 19.
"At no time during this meeting did Mr. Levine indicate that
there was a process, that there was any urgency to act or that
there were discussions with another potential buyer," said
Dollar General Chief Executive Rick Dreiling in a letter to
Family Dollar's board on Wednesday.
"Had we left the meeting with the belief that a sale of
Family Dollar was imminent, we assure you that our course of
action would have been different."
Dollar General offered to buy Family Dollar Stores for $8.95
billion on Monday, trumping the agreed deal with Dollar Tree
that was announced on July 28.
Levine would remain CEO of Family Dollar if the company is
bought by Dollar Tree, but is expected to lose his job if Dollar
General buys Family Dollar. Dreiling has said he will delay
retirement to stay on as CEO of the combined company if Dollar
General buys Family Dollar.
Dollar General said its offer was better for Family Dollar's
shareholders than the deal offered by Dollar Tree, "although
perhaps not for Mr. Levine personally."
Dollar stores are popular with low- and middle-income U.S.
consumers in a weak economy but are facing increasing
competition from big-box retailers such as Wal-Mart Stores Inc
, putting pressure on them to merge.
The U.S. market for dollar stores grew 45.7 percent to $48.2
billion between 2008 and 2013 and is expected to grow 18 percent
in the next five years, according to Euromonitor International.
Billionaire investor Carl Icahn has also questioned whether
Levine's future role at Dollar Tree could have influenced the
decision to go ahead with the Dollar Tree deal.
Icahn, who took a 9.4 percent stake in Family Dollar in
June, has pushed the company to sell itself to Dollar General.
Family Dollar said on Monday it was reviewing Dollar
General's offer, but had not changed its recommendation in
support of a merger with Dollar Tree.
(Reporting by Supriya Kurane and Ramkumar Iyer in Bangalore;
Editing by Gopakumar Warrier and Ted Kerr)