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Family Dollar response: Dollar General merger proposal won’t pass muster with FTC

BY Michael Johnsen

 

MATTHEWS, N.C. — Family Dollar on Friday rejected the revised proposal made by Dollar General on Sept. 2 on the basis of antitrust regulatory considerations. The Dollar General offer may be financially superior, the dollar store operator noted, but it's not likely to pass muster with the Federal Trade Commission. 
 
“Our board of directors, with the assistance of outside advisors and consultants, reviewed all aspects of Dollar General’s revised proposal and unanimously concluded that it is not reasonably likely to be completed on the terms proposed," stated Howard Levine, chairman and CEO of Family Dollar. "There is a very real and material risk that the transaction proposed by Dollar General would fail to close, after a lengthy and disruptive review process. Accordingly, our board has rejected Dollar General’s revised proposal and reaffirmed its support of the transaction with Dollar Tree, which delivers attractive value in the form of immediate upfront cash and upside participation in a combined Dollar Tree-Family Dollar entity, as well as closing certainty.”
 
“We are focused on delivering to Family Dollar shareholders the highest value with certainty, and the Dollar Tree transaction does just that. Dollar Tree has taken the antitrust risk off the table by committing to divest as many stores as necessary to obtain antitrust clearance. We remain fully committed to the Dollar Tree transaction,” added Ed Garen, a Family Dollar director and co-founder and chief investment officer at Trian Fund Management. “Dollar General’s revised proposal, on the other hand, does not eliminate regulatory risk for Family Dollar shareholders. Dollar General has repeatedly stated that antitrust is not a risk, yet they have put forth proposals that require Family Dollar shareholders to bear the ultimate risk. Receiving a reverse breakup fee with an after-tax value of less than $3 a share does virtually nothing to compensate the Family Dollar shareholders for assuming that risk.”
 
Family Dollar’s merger agreement with Dollar Tree contains a customary provision that permits Family Dollar to enter into discussions and share information with any competing bidder, but only if the board is able to determine that failure to do so would be inconsistent with its fiduciary duties and that the unsolicited, written proposal from the competing bidder would be reasonably expected to lead to a proposal that is not only financially superior, but also “reasonably likely to be completed on the terms proposed.”
 
Family Dollar contends that the FTC would take a more critical review of any proposed Dollar General/Family Dollar merger. 
 
The Family Dollar Board’s unanimous determination to reject Dollar General’s revised proposal and to accept Dollar Tree’s commitment to divest as many stores as required for antitrust approval follows the unanimous recommendation of a committee of four non-management independent directors that has been overseeing the company’s consideration and exploration of strategic alternatives since January 2014. This committee consists of Glenn Eisenberg, Ed Garden, George Mahoney, Jr. and Harvey Morgan.
 

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SoapBox Soaps expands presence in Whole Foods

BY Ryan Chavis

ALEXANDRIA, Va. — SoapBox Soaps, a mission-based personal care company, launched an all-natural line of soaps in five new Whole Foods regions earlier this week. More than 100 Whole Foods stores in the Northeast, Northern California, Southern Pacific, Rocky Mountain and Florida regions will now stock the bar soaps. 
 
All regions will stock SoapBox’s Lemongrass and Black soap varieties, with individual stores stocking a selection of SoapBox’s liquid hand soaps and body soaps, which are available in Lavender, Tea & Ginger, Black, Pomegranate, Apple and Mandarin varieties.
 
SoapBox donates 70% of its product sales within the United States, with the remainder going to communities in need across the globe. By purchasing SoapBox products from local Whole Foods stores, consumers now can see SoapBox’s mission take shape and directly impact their communities, the company said.

“The expansion into these regions means that SoapBox’s charitable mission can continue to have a larger impact on communities around the United States,” said SoapBox founder and CEO Dave Simnick. “Water related disease is one of the leading causes of death worldwide and we aim to eradicate the possibility of this happening on our doorstep.”
 
SoapBox's bar soaps have a suggested retail price of $4.99. Liquid hand soaps and body washes are priced at $6.99 and $7.99, respectively. 

 

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Clorox takes to Vine to showcase new bleach

BY Ryan Chavis

OAKLAND, Calif. — Clorox bleach is breaking some rules in celebration of Mercedes-Benz Fashion Week, revealing a  “Cloey De La Rox” line of undies via social media platform Vine for an underwear fashion show. The makers of Clorox are using the social media initiative to highlight the benefits of the brand's new Clorox Smart Seek Bleach, which enables white clothes as well as whites with a bit of color to be thrown into the same bleach load. 
 

“Clorox bleach has been trusted to keep your whites white for generations, but fashion and laundry routines have changed,” said Katie Keil, associate director of marketing for Clorox. “Now, with Clorox Smart Seek Bleach you can use the bleach brand you’ve always trusted to keep both whites and whites with a little bit of color bright and clean in the same laundry load, saving you time and money.”
 
Clorox Smart Seek Bleach is safe on most prints, patterns and trims on white garments when used as instructed. It is available in 55-oz and 116-oz bottles in Fresh Meadow and Clean Linen scents. 

 

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