Tennessee-based discount retailer Dollar General has announced that it has entered into an agreement to be acquired by affiliates of private equity group Kohlberg Kravis Roberts (KKR) in a US$7.3bn deal. The purchase terms include the assumption of approximately $380m of net debt.
Dollar General shareholders will receive $22 in cash for each share of Dollar General common stock they hold, representing a premium of approximately 31% over Dollar General’s closing share price on 9 March, 2007, and a premium of approximately 29% over the average closing share price during the previous 30 trading days.
The Dollar General board has unanimously approved the merger agreement and has recommended that the company’s shareholders vote in favour of the transaction.
“We are very pleased to announce a transaction that provides excellent value for our shareholders, representing a significant premium and the certainty of cash,” said Dollar General chairman and CEO David A. Perdue. “Our board of directors firmly believes that this is the right transaction for our shareholders, employees and customers. Going forward, employees will benefit from the continuity of a solid business plan and new investments in the future of the business. Our customers will continue to enjoy the convenience, value and great service that they’ve come to expect from Dollar General over our proud 68-year history.”
Michael M. Calbert of KKR, said: “Dollar General is an outstanding company with a strong market presence and a rich legacy. We have worked closely with many retail companies in driving success and unlocking value, and we look forward to partnering with the Dollar General team to position the company for future growth.”
The deal, which remains subject to the approval of Dollar General shareholders, customary closing conditions and regulatory approvals, is expected to close during the third quarter of 2007.
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KKR has recently been linked to a number of international retail takeover moves, and is currently believed to be eyeing Sainsbury’s and Alliance Boots in the UK, and Australia’s Coles.
