In a note released Wednesday, FBR said, despite an earlier report from Bloomberg that noted 50/50 odds, a competitive from Dollar General (NYSE: DG) for Family Dollar Stores (NYSE: FDO) has a "relatively low probability."
The FBR team believes the merger was potentially going to be announced as early as mid-June and noted that Dollar General was likely approached in April or May to gauge whether or not a potential merger would change the company's willingness to make an offer for Family Dollar. To which, FBR suspects Dollar General declined.
The firm believes the original plan was for Dollar Tree (NASDAQ: DLTR) to offer $65-70 per share in a cash deal. However, following Carl Ichan's announcement and the subsequent boost to Family Dollar shares, the economics of the deal were thrown off, which is when the equity portion was added.
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