For dollar tree, how can this be the case?
We see this as a win for the dollar shareholders.
They are also getting all cash.
80% cash, 20% stock.
So family dollar, you are getting more money, and it is all cash.
I will take that now, thank you.
If dollar general gets the deal, then they will get dominance in this market, right?
You have to remember that dollar tree has coexisted with family dollar and even walmart and others, so i do not necessarily think that a dollar general/family dollar deal is a ad think.
First off, they get a breakup fee of $305 million, which is about $1.50 per share.
And this is not a more sort of murky, highly leveraged play.
They were forced to downgrade after the announcement with dollar tree.
Dollar general, doesn't it have to give up a certain amount of storage to satisfy regulators?
They may have to.
The regulators may look at certain markets.
Assuming they win, they may have to sell off stores, and then dollar tree can come in and buy those.
It is not a bad company, but it can use some improvement.
So they may end up getting a decent deal and picking up some market share and some stores with a little bit less work to do.
What do you think?
It is a seriously contested segment of the market.
These stores are even taking customers from walmart and target.
And the low income consumer is struggling, so they cannot go to a walmart or further out store, and they are getting their shares, but they are also losing money because their customers are not able to spend or grow their stores as quickly, but about clothing stores, the 700 that they could close, we have found that 330 five stores should close regardless because they are either operating literally right next to a dollar store across the street.
So they are going to have to close them.
Dollar general is going to have 20,000 stores, and this will be $28 million in sales if they get this combination.
Will regulators be worried about this?
Or not something that they will pay attention to?
I do not think they will be having too much of a problem with the f -- with the agency.
They are competing with walmart.
They are competing with the convenience stores and drugstores.
You could even argue they are competing against amazon.
When you look at the market this broadly, i do not think it is much of a problem.
About regulation, some people earlier were saying the brick-and-mortar, it is a universe unto itself, because amazon takes from everybody and other online players.
Amazon is not the only place where you can buy cheap stuff on the web.
Some of the dollar store customers are so low income that they are not buying huge quantities at walmart.
And walmart has lost some of these customers because the dollar stores do not have enough cash to go in and by the 18-roll toilet paper or other.
Also, who has the room for all of this stuff?
What do you do when you bring home 18 rolls of paper towels, the big bounty saying?
I have never understood that.
There is a specific dollar store customer.
There would be an antitrust review, and i think there will be some overlap in store areas where they will have to close or selloff, and assuming dollar tree mousses, they can end up picking up some stores.
Will dollar tree come back with a bid, do you think?
That just means they have to lever up their balance sheet even more.
So not good for them.
What do you think?
I think it is possible, but at the end of the day, dollar tree can always bit more because there is more synergy between dollar tree and dollar store.
So this is likely, if everyone is acting intelligently , and with the shareholders, this is pretty much how it will pan out.
I think so.
I think they have more firepower.
With an all-cash bid, i think dollar tree would have to really lever up to make a competitive bid, and i think dollar general can always go a little bit more and get this deal.
I have been waiting my whole life for a win-win-win, so if this is it, i am going to celebrate.
I am going to mark this day on my calendar.
A queue so much for joining us.
David, always a pleasure.
Coming up, taco bell.
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