Dollar General Corp. is adding its two cents in Family Dollar’s uncertain future.
Bloomberg reported that Dollar General is working with advisers to determine a bid for the retail chain. The bid would counter Dollar Tree’s offer of $8.5 billion for Dollar General that the two parties agreed to last month, but haven’t yet finalized.
Dollar General passed on earlier opportunities to purchase Family Dollar, but according to Bloomberg, the company is looking at its options before the retailer is out of its grasp for good. If Dollar General passes on the chance, Family Dollar and Dollar Tree will likely overtake it to become the largest dollar store group, with a total of 13,000 stores in 48 states and Canada.
Dollar Tree’s acquisition of Family Dollar was intended to expand the company’s reach from suburban neighborhoods to urban and rural regions. However Poonam Goyal, a senior retail analyst for Bloomberg Intelligence, noted that Dollar General could be a better match for Family Dollar. She said, “While Family Dollar and Dollar Tree are dollar stores, they are very different dollar stores.”
Dollar Tree focuses on variety and seasonal merchandise. Both Family Dollar and Dollar General specialize in inexpensive household goods and food. According to data complied by Bloomberg, the merging of the two similar stores could amount to $28 billion in annual revenue.