Dollar General Sends Letter to Family Dollar’s Board of Directors

  Dollar General Sends Letter to Family Dollar’s Board of Directors

Business Wire

GOODLETTSVILLE, Tenn. -- August 20, 2014

Dollar General Corporation (NYSE: DG) today announced it has sent the
following letter to the Board of Directors of Family Dollar Stores, Inc.

August 20, 2014

Board of Directors
Family Dollar Stores, Inc.
10401 Monroe Road
Matthews, North Carolina 28201

To the Board of Directors of Family Dollar Stores, Inc.:

We have reviewed theForm S-4on the background of your current merger
agreement with Dollar Tree. As the Family Dollar Board of Directors considers
our superior proposal, we believe it is important for you to take into account
certain important facts that are not included in the Form S-4 relating to our
interaction with your company.

While the Form S-4 references various meetings between our companies’
representatives over the years, it fails to mention that Dollar General
representatives have consistently expressed a keen interest in putting our two
companies together. The Form S-4 also fails to mention that on more than one
occasion at such meetings, Howard Levine expressed his own interest in the
social issues of a combination, including, among other things, his desire to
be chief executive officer of the combined companies. We cannot help but
question whether Dollar General’s failure to embrace such requests by Mr.
Levine weighed into Family Dollar’s decision to pursue an agreement with
Dollar Tree.

As you are aware, we continued to express our interest in exploring a
combination into June of this year. During the June 7, 2014, phone call
referenced in the background section of the Form S-4, our representative
reiterated Dollar General’s interest in potentially acquiring Family Dollar
and stated our preference to negotiate directly with the Board of Directors
and not in the public media, as might be the case with an activist investor
involved, and suggested a meeting with the Dollar General CEO as soon as

That meeting was held on June 19, 2014, just days before the Family Dollar
Board decided to enter into exclusive negotiations with Dollar Tree. During
the June 19 meeting, although noting that the timing was not optimal for
Dollar General, ourrepresentatives expressed more than once our interest in
exploring a combination with Family Dollar. 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. In fact, Mr.
Levine’s response to specific questions posed by our representatives gave us
quite the opposite impression. 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.

At that meeting, the Dollar General representatives communicated to Mr. Levine
that Dollar General’s interest likely would be at a modest premium to the
current stock price ($68.14 at such time). It is surprising, then, that,
according to the Form S-4, your board was considering at that time a proposal
in that range from Dollar Tree, and yet no representative of Family Dollar
followed up with any representative of Dollar General after that meeting and
before entering into the merger agreement with Dollar Tree.

This lack of engagement is puzzling. Regrettably, as a result, we are now
forced to factor a $305 million break-up fee into our offer – consideration
that could have been better used to maximize value for the Family Dollar

Nonetheless, we have presented you with a superior proposal for your
shareholders (although perhaps not for Mr. Levine personally), and we urge you
to evaluate our proposal on its merits considering this full set of facts and
in keeping with your obligation to consider first and foremost the best
interests of your shareholders.

Finally, we have heard the media reports in which unnamed sources close to
Family Dollar are claimed to have expressed concern about antitrust matters
relating to a potential acquisition by Dollar General. As we stated in our
offer letter, we have engaged experienced counsel and an economist and have
conducted extensive review and analysis of these matters, and we are confident
that we will be able to quickly and efficiently resolve any potential
antitrust issues. In fact, we believe that the number of store divestitures
contained in our offer letter is more than sufficient to take this issue
completely off the table. We remain ready to share with your counsel the
conclusions of our extensive antitrust work once you have taken the
appropriate steps under your existing merger agreement with Dollar Tree to
enable us to begin discussions.

We urge the Family Dollar Board of Directors to act in the best interests of
the Family Dollar shareholders and take the necessary steps to enter into
discussions with us.


Rick Dreiling
Dollar General Corporation
Chairman and Chief Executive Officer

Forward-Looking Statements

Dollar General includes “forward-looking statements” within the meaning of the
federal securities laws throughout this release, including by way of example
and without limitation plans, intentions and expectations regarding Dollar
General’s proposal to acquire Family Dollar. A reader can identify
forward-looking statements because they are not limited to historical fact or
they use words such as “may,” “will,” “could,” “should,” “would,” “expect,”
“believe,” “anticipate,” “project,” “plan,” “estimate,” “forecast,” “goal,”
“objective,” “committed,” “intend,” “continue,” or “will likely result” and
similar expressions that concern Dollar General’s strategy, plans, intentions
or beliefs about future occurrences or results.

Forward-looking statements are subject to risks, uncertainties and other
factors that may change at any time and may cause actual results to differ
materially from those that Dollar General expected. Many of these statements
are derived from Dollar General’s operating budgets and forecasts, which are
based on many detailed assumptionsthat Dollar General believes are
reasonable, or are based on various assumptions about certain plans,
activities or events which we expect will or may occur in the future. However,
it is very difficult to predict the effect of known factors, and Dollar
General cannot anticipate all factors that could affect actual results that
may be important to an investor. All forward-looking information should be
evaluated in the context of these risks, uncertainties and other factors,
including those factors disclosed under “Risk Factors” in Dollar General’s
most recent Annual Report on Form 10-K and any subsequent quarterly filings on
Form 10-Q filed with the Securities and Exchange Commission.

All forward-looking statements are qualified in their entirety by the
cautionary statements that Dollar General makes from time to time in its SEC
filings and public communications. Dollar General cannot assure the reader
that it will realize the results or developments Dollar General anticipates
or, even if substantially realized, that they will result in the consequences
or affect Dollar General or its operations in the way Dollar General expects.
Forward-looking statements speak only as of the date made. Dollar General
undertakes no obligation to update or revise any forward-looking statements to
reflect events or circumstances arising after the date on which they were
made, except as otherwise required by law. As a result of these risks and
uncertainties, readers are cautioned not to place undue reliance on any
forward-looking statements included herein or that may be made elsewhere from
time to time by, or on behalf of, Dollar General.

About Dollar General Corporation

Dollar General Corporation has been delivering value to shoppers for 75 years.
Dollar General helps shoppers Save time. Save money. Every day!® by offering
products that are frequently used and replenished, such as food, snacks,
health and beauty aids, cleaning supplies, basic apparel, house wares and
seasonal items at low everyday prices in convenient neighborhood locations.
With more than 11,500 stores in 40 states, Dollar General has more retail
locations than any retailer in America. In addition to high quality private
brands, Dollar General sells products from America's most-trusted
manufacturers such as Clorox, Energizer, Procter & Gamble, Hanes, Coca-Cola,
Mars, Unilever, Nestle, Kimberly-Clark, Kellogg's, General Mills, and PepsiCo.
For more information on Dollar General, please visit


Dollar General Corporation
Mary Winn Pilkington, 615-855-5536
Emma Jo Kauffman, 615-855-5525
Brunswick Group:
Steve Lipin or Shahed Larson, 212-333-3810
Dollar General Corporation:
Media Hotline, 877-944-DGPR (3477)
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