8-KMaterial AgreementsExhibits & Filings

DOLLAR TREE, INC. 8-K Report, Material Agreement (Jul 29, 2014)

Filed July 29, 2014For Securities:DLTR

Summary

This Form 8-K filing by Dollar Tree, Inc. announces a significant development: the entry into a definitive Agreement and Plan of Merger with Family Dollar Stores, Inc. on July 27, 2014. This agreement outlines the terms for Dollar Tree's acquisition of Family Dollar, where Family Dollar will merge with a wholly-owned subsidiary of Dollar Tree, with Family Dollar surviving as a subsidiary. The transaction is structured as a stock-and-cash deal, where Family Dollar shareholders will receive a combination of cash and Dollar Tree common stock. The stock component's value is contingent on Dollar Tree's volume-weighted average stock price over a specific trading period prior to the merger's closing, with defined caps and floors for the exchange ratio. The filing details the mechanics of how Family Dollar's outstanding stock options, restricted stock units, and performance share rights will be converted into Dollar Tree equity or cash equivalents. The completion of the merger is subject to customary closing conditions, including the approval of Family Dollar's stockholders and regulatory approvals, such as the Hart-Scott-Rodino waiting period. Notably, the merger is not subject to any financing condition for Dollar Tree. The agreement also includes provisions for Family Dollar's CEO, Howard R. Levine, to join Dollar Tree's Board of Directors and outlines terms for his continued employment and compensation post-merger. Additionally, Dollar Tree has secured significant debt financing commitments to fund the cash portion of the acquisition and refinance existing debt.

Key Highlights

  • 1Dollar Tree, Inc. enters into a definitive Agreement and Plan of Merger to acquire Family Dollar Stores, Inc.
  • 2The acquisition is a mix of cash and stock consideration for Family Dollar shareholders.
  • 3The stock consideration's value is tied to Dollar Tree's volume-weighted average stock price over a specified period.
  • 4The merger is subject to Family Dollar shareholder approval and regulatory clearance (e.g., HSR Act).
  • 5Financing for the transaction is secured through committed debt facilities and available cash, with no financing condition for Dollar Tree.
  • 6Key Family Dollar executive, Howard R. Levine, is slated to join Dollar Tree's Board and has a retention agreement.
  • 7Voting and support agreements have been executed with significant Family Dollar stockholders, including management and Trian Fund Management, to ensure approval.

Frequently Asked Questions

The filing does not state a single fixed total value. The deal involves a combination of cash and stock. The cash component is $59.60 per share, and the stock component's value depends on Dollar Tree's stock price in the period leading up to the merger's closing, with specific exchange ratios defined based on that price. The total consideration for each Family Dollar share will be $59.60 in cash plus a fraction of a Dollar Tree share.

The merger is contingent upon several conditions, including the adoption of the Merger Agreement by Family Dollar's stockholders, the expiration or termination of waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act, the accuracy of representations and warranties (subject to a material adverse effect standard), and material compliance with obligations by both parties. The absence of a material adverse effect on Family Dollar is also a condition for Dollar Tree to close the merger.

Outstanding Family Dollar stock options will be converted into options to purchase Dollar Tree stock. Similarly, Family Dollar restricted stock units (RSUs) will be converted into RSUs for Dollar Tree stock. The number of shares for these converted awards will be determined by an 'Award Exchange Ratio,' which incorporates the cash and stock components of the merger consideration and Dollar Tree's trading price.

Howard R. Levine is expected to be appointed to the Board of Directors of Dollar Tree following the merger's completion. The filing also details a retention letter agreement outlining the terms of his compensation and employment post-merger, including certain waivers related to his employment agreement and compliance with restrictive covenants.