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Friday, August 29, 2014

Family Dollar’s Rejection of Dollar General Is About More Than Money

Original story: NYTimes.com

In the latest dollar wars, it is not about the money.

Family Dollar has been at the center of a tug-of-war, as two of its biggest competitors in the industry woo it. On Thursday, it rejected a nearly $9 billion bid by Dollar General that was intended to break up the agreed-to combination of Family Dollar and Dollar Tree. An Atlanta M&A Lawyer felt the deal was fair.

Dollar General has offered more money to Family Dollar shareholders than Dollar Tree’s $8.5 billion deal, but it was not enough to sway the Family Dollar board. Instead, the Family Dollar board unanimously rejected Dollar General’s bid out of concerns over antitrust approval, tinged with doubts that Dollar General was even a serious bidder.

Rejecting a bid over concerns other than price when a higher offer is in place is dangerous ground for any board. Family Dollar’s shareholders are bound to be wondering how this money can be left on the table. An Aiken ADR Lawyer is wondering the same thing.

But Family Dollar’s board may not have had a choice.

A director of Family Dollar, Edward P. Garden of Trian Fund Management, summarized the problem when he stated in a news release on Thursday that “we will not jeopardize the Dollar Tree deal for a transaction with Dollar General that has a high likelihood of not closing due to antitrust considerations.”

So what is going on?

Family Dollar is forced to abide to the terms of the acquisition agreement it entered into with Dollar Tree. That agreement permits Family Dollar to speak with Dollar General only if the Family Dollar board deems that Dollar General’s proposal would be superior to Dollar Tree’s. The acquisition agreement further states that a superior proposal is one that “is reasonably likely to be completed on the terms proposed.” A West Orange ADR Lawyer is following the story closely.

So in order to move forward with the Dollar General bid, Family Dollar’s board had to find that the antitrust risk was not a significant risk to the completion of any deal with Dollar General.

Dollar General offered in its initial bid to divest up to 700 stores, a number that it said was “approximately the same percentage of the total combined stores represented by the 500-store divestiture commitment in the Dollar Tree merger agreement.”

But for Family Dollar, this was not enough. The two companies are No. 1 and No. 2 in the “dollar store” space. And although they could all use some name differentiation, there are differences among all three companies.

At Dollar Tree, everything costs a dollar, literally, while at Family Dollar and Dollar General it is generally $10 or less. Not only do Family Dollar and Dollar General have similar business models, there is also more store overlap. According to a person close to Family Dollar, the board believes well more than 700 stores would need to be sold off for such a merger to pass muster.

This is the problem. Once Family Dollar’s board determined that more divestitures were needed, then the acquisition agreement required the company to reject Dollar General’s bid since the proposal was not reasonably likely to lead to a superior deal capable of completion. And no doubt Dollar Tree’s counsel was there, arguing that under the acquisition agreement there were no grounds for Family Dollar to even speak to Dollar General.

Not surprising, Dollar General disagrees. According to a person briefed on the matter, there should be no significant antitrust risk problems, because the market that Dollar General and Family Dollar are in is a “fill-in” market where people shop for items in addition to supermarkets. Thus, it is quite competitive with not just the dollar stores, but convenience stores. An Atlanta ADR Lawyer is not agrees that the stores are different.

And that is the difference between the two positions. Family Dollar appears to view the world as dollar stores with only a few competitors, while Dollar General is trying to make it about convenience stores and the like. And while the success of the deal depends on that, for now Family Dollar sees too much risk.

Shareholders may be upset, but a shareholder activist Family Dollar is ironically helped in making its case by a shareholder activist. Nelson Peltz’s Trian Fund Management holds 7.34 percent of Family Dollar, and Mr. Garden is Trian’s representative and one of the four independent directors considering the deal on Family Dollar’s board. The fact that Mr. Garden is voting to reject the Dollar General bid is an outward signal that the board is acting appropriately.

In truth, the history of the parties may be leading the Family Dollar board to think that Dollar General is simply trying to muck up the combination of Family Dollar and Dollar Tree.

If you want a precedent for this, look at the bidding for Dollar Thrifty Automotive Group. The first attempt at a merger between Hertz and yet another dollar, Dollar Thrifty, was voted down by shareholders in favor of a proposal by Avis that never succeeded. (After several years, Hertz finally won, but not without a lot of back and forth.) Family Dollar doesn’t want to be another Dollar Thrifty.

Family Dollar recently detailed the negotiations it had with both Dollar General and Dollar Tree before the Dollar Tree deal was announced. In a Securities and Exchange Commission filing for Family Dollar’s shareholder meeting to approve the deal, Family Dollar described the talks that led to the Dollar Tree deal.

In this recounting, which was written by Family Dollar, Dollar General flickers in and out of the negotiations, and disappears inexplicably. Dollar General’s chief executive appears to make an offer, but then appears to be hesitant to negotiate because of the presence of Carl C. Icahn as the largest shareholder of Family Dollar (at the time, he owned 9.4 percent but now owns 3.6 percent). Dollar General stated that it simply didn’t want to negotiate with Mr. Icahn.

The parties then meet and Dollar General states it is not interested in a transaction. It then simply disappears without any formal bid, according to Family Dollar. With no bid forthcoming from Dollar General, Family Dollar then decided to negotiate exclusively with Dollar Tree.

On Wednesday, Dollar General offered its own account. First, the company played the self-interest card stating that the chief executive of Family Dollar, Howard R. Levine, expressed “his desire to be chief executive officer of the combined companies” and that Dollar General wondered whether their rejection of this point “weighed into Family Dollar’s decision to pursue an agreement with Dollar Tree.”

Dollar General also stated that had it known about the imminent Dollar Tree deal,“we assure you that our course of action would have been different,” and they would have been a more eager bidder.

In other words, Dollar General is implying that it didn’t disappear, but that it wasn’t told of what was going on with another party, so it did not pursue Family Dollar more aggressively. And perhaps the chief of Family Dollar is to blame.

Needless to say, Mr. Levine was not happy about these statements, and he said on Thursday that the Dollar General letter “contained blatant mischaracterizations.”

Clearly, the two parties are acting a bit childish trading he said/he said accusations trying to spin the public, when perhaps they should be focusing more on the business terms. But such is a takeover where chief executive egos can shine and the past cannot be forgotten.

So where does that leave us?

Well, Family Dollar’s stock price continued to trade Thursday morning well above Dollar Tree’s offer of $74.50 a share.

Dollar General will continue its pursuit of Family Dollar, but without putting up more of a defense of the antitrust issues, Family Dollar will be stuck.

The question will then become whether Family Dollar’s shareholders are willing to vote down a bird in the hand — the Dollar Tree acquisition — for the uncertain Dollar General one.

For this, we’ll have to see whether the Family Dollar stock price comes down to earth. If not, then Dollar Tree will have to decide whether to raise its bid.

It’s a convoluted dance, but this leaves the next move with Dollar General.

Family Dollar will be looking for Dollar General to offer some type of “hell or high water” provision that would force the company to get rid of more stores if there are antitrust problems.

The question is whether Dollar General offers such a provision up in order to show that “look ma,” there really are no antitrust issues.

Alternately, this battle will simply continue with a he said/she said tale of a failed relationship. And we all know how well that works.

Wednesday, August 13, 2014


Original Story: USAToday.com

No one knows more about a workplace than its employees. Employee opinions reflect basic measures, such as pay, perks, benefits, and hours worked. But they are also influenced by factors such as a company's culture, internal politics, and even general mood — intangibles that can be lost in internal audits and consultancy surveys.

While companies have websites, public relations teams, and recruiters to tailor their message to prospective hires, employees have far fewer forums to communicate their views. Glassdoor.com, a career community website, provides the opportunity for employees to give their own opinions, and for potential employees to research the company. To identify the 75 Best Companies to Work For, 24/7 Wall St. examined company ratings provided by current and former employees to Glassdoor.com. (See how we made our list in the "Methodology" section below.) An Atlanta Corporate Lawyer agrees that companies have the upper hand.

Employees in certain sectors are far more likely to offer a positive opinion of their employer than others. Technology companies are certainly well represented among the highest-rated employers, as are consulting firms. Of the 75 best companies, only 12 received an average rating of 4.0 or higher out of 5. Of these, four are in the technology space — Facebook, Google, LinkedIn, and Riverbed Technology — and three are consulting firms.

Being a market leader also appears to help. Many well-reviewed companies are the leaders in their respective industries, and as a result are financially successful. Apple, Intel, Procter & Gamble, and Walt Disney are all among the top-rated employers on Glassdoor.com and among the largest public companies in the world by market capitalization. Others are leaders in public relations, like Edelman and auditing giant EY, formerly Ernst & Young. A Tulsa Employment Lawyer represents clients with issuses in Oklahoma whose Glassdoor.com ratings are usually not that good.

Many of the best companies to work for have cultivated an extremely strong reputation among the broader public as well. American Express, Facebook, Google, and SAP are all among the best companies to work for and among the top companies by brand value, according to brand consultancy BrandZ. Top employers also perform well according to other measures of brand awareness, such as CoreBrand and Interbrand.

Not surprisingly, companies with strong employee reviews also give CEOs good grades. It would seem leadership matters, not just for running a company and producing returns for shareholders, but also for promoting employee satisfaction. Among the 75 best companies to work for, 38 have CEOs with an approval rating of 90% or higher. In all, just 10 CEOs have an approval rating below 80%, and all have the endorsement of at least two-thirds of their employees. Hennion and Walsh has a good approval rating and can be reach through LinkedIn.

Employees at these companies also frequently cite a good office culture and work-life balance. In many cases, employees also praise a company if it promotes learning or training opportunities and career development. At several of these companies, employees also note a good benefits package, which is uncommon in many industries, such as retail.

These are the states with the most companies that are highly praised by their workers.

1. California

Sixteen of top 75 best companies to work for are based in California, by far the largest number among of any of the states. The roster includes the top two highest rated companies by their workers in all of the U.S. -- LinkedIn and Facebook -- and their powerful peers in the tech world, most notably Apple and Google.

Energy giant Chevron and entertainment titan Walt Disney also make the Golden State's gallery of standout companies. The others: Adobe, Intel, Intuit, Agilent Technologies, NetApp, Qualcomm, Riverbed Technology, Salesforce.com, Synopsys and TIBCO Software.

2. Texas

Second is the Lone Star State, with 10 companies on the list. Nationally known brand Southwest flies in as the state's most highly rated company by workers, ranking eight in all the U.S. A McAllen Employment Lawyer said he uses this airlines and has been happy with the service.

Texas Instruments, Whole Foods Market and Keller Williams, also on the Texas list, have a broad name recognition as well. The state's big presence in the nation's energy markets are represented by industrial engineering firms Fluor, KBR and Schlumberger. The others: Grocery chain H-E-B, National Instruments and Rackspace, a "cloud" management company.

3. New York

Next is the Empire State, with seven companies on the list. The Big Apple is a big presence among them, with New York City serving as home base for six of the companies. They represent a mix of the financial, fashion and business worlds: American Express, Bristol-Myers Squibb, EY (formerly Ernst & Young), Goldman Sachs, J. Crew and McKinsey & Company. A Westchester County Real Estate Lawyer said business is booming with new sales.

The remaining company is Wegman's, the upscale grocery chain, based across the state, in Rochester.

4. Illinois (tie)

The Land of Lincoln comes in fourth, in a tie with Washington State, serving as home to four companies on the national best-liked list. Highest rated among them is Orbitz (No. 13 on the national list), the travel website. The rest: CareerBuilder, Hyatt, John Deere and Cummins, a power-generation giant and builder of engines.

4. Washington (tie)

Yes, Seattle-area tech powerhouse Microsoft joins California rivals Apple and Google on the national list of employees' most-admired companies. Another venerable, global icon headquartered nearby passes muster as well -- Starbucks. The other two companies from The Evergreen State? Costco Wholesale and REI, the outdoor clothing and gear retailer. These businesses can call on an Edmonds Employment Lawyer for services.


In order to determine America's best companies to work for, 24/7 Wall St. independently reviewed employee ratings and testimonials on Glassdoor.com. Among the more than 400 companies reviewed, 24/7 Wall St. identified the 75 businesses that received the highest overall scores.

To be considered, a company had to have at least 300 reviews. Employers were also excluded if they were a government agency or bureau, a non-profit, or a subsidiary of a larger company. An exception was made for CareerBuilder, which is majority-owned by publishing and broadcast firm Gannett, since it is a joint venture between several companies. Hennion & Walsh has been tweeting about their reviews.

Employee totals and revenue figures represent the most recent fiscal year data available. Sources include: company documents, Securities and Exchange Commission filings, S&P Capital IQ, and Forbes' America's Largest Private Companies 2013. For companies that do not provide data, Forbes estimates revenue.

In the case of S&P Capital IQ, employee totals are calculated as the equivalent of full-time employees, treating a part-time worker as "half" of a full-time employee. Employee counts for companies with franchises only count workers employed by the company. Businesses will use the services of a Haddonfield Employment Lawyer to mediate employee issues.

Dollar conversions from S&P Capital IQ were used for companies that publish financial statements in currencies other than the U.S. dollar. In the case of companies where data is not from S&P Capital IQ, we converted revenue into dollars based on the effective exchange rate at the end of the company's fiscal year.


Original Story: USAToday.com

You may be basking in the last few weeks of summer and counting down to Labor Day getaways, but for retailers it was time to go back to school a month ago.

That's when many of them started promotions for one of the biggest shopping periods of the year — one that's also become perhaps the most prolonged shopping period of the year, with families buying back-to-school items from practically the fourth of July until after classes start. Deloitte's annual back-to-school shopping survey out last month found that more than a quarter of parents plan to finish their shopping after the start of the school year.

"We're seeing it expanded out throughout the season," says Steve Bratspies, executive vice president of general merchandise for Walmart. He says customers are shopping more frequently and making smaller basket purchases over a longer period of time rather than doing one huge buy.

And that means stores are throwing absurdly cheap prices — think 17-cent notebooks — and price-matching guarantees at customers in an effort to stay relevant and competitive over three months of back-to-school shopping.

• Staples is offering a 110% price-match: If a customer finds a product cheaper somewhere else, Staples will match the price plus give the customer back 10% of the difference. And those 17-cent notebooks are part of a list of items at low prices for the entire shopping season. Rulers, glue, paper, colored pencils, erasers, crayons, ballpoint pens and markers are all on sale for a dollar or less through Labor Day.

• Walmart has 30% more back-to-school items available online than last year and is reducing prices on 10% more back-to-school items than last year both online and in stores. This month, a price-matching pilot program rolled out store-wide. It allows customers to enter an ID code listed on their in-store receipt at Walmart.com and compare the prices of everything they bought to all advertised prices from that week. If Walmart's prices were more expensive, it will refund the difference in the form of an e-gift card.

• Old Navy, already known for its steep back-to-school promotions, has T-shirts starting at $4 and jeans starting at $8. "We obviously started early," says Jamie Gersch, vice president of marketing. "And then want to make sure we stay relevant through Labor Day." The retailer started back-to-school deals in mid-July.

• Sears is trying to make shopping more enticing by expanding in-store pickup across both Sears and Kmart stores. Customers can order items on Kmart.com but pick them up at a Sears, and vice versa. Sears customers don't even have to get out of the car if they opt for in-vehicle pickup for online orders.

The National Retail Federation expects families to spend $670 on average during the back-to-school season, up 5% over last year, on supplies, clothes and electronics.

Retailers are also sympathizing with teachers, who are increasingly paying for classroom supplies with their own money, by luring them with extra discounts. Walmart has a 10% discount for teachers throughout the season. Staples had a teacher appreciation weekend the first weekend of August — teachers who are rewards members got 25% off — and the company donated $1 million to Donors Choose, an organization that helps teachers pay for supplies.

Retailers are pushing a longer shopping season and earlier-than-ever deals to try to get customers to buy more over a longer period of time, says Mark LoCastro, spokesman for DealNews, which tracks price and discount trends across the Web.

"If they can push into your mind 'don't procrastinate, shop early,' they're hoping you'll do some impulse buys," he says. Plus retailers are also responding to competition. "If you're a major retailer and your primary competitors start to advertise in early June you're going to lose out on sales," LoCastro says.

With constant discounts though and 24/7 access to online retailers, shoppers have lost the sense of urgency that can lead to such impulse buys, says Simeon Siegel, retail equity analyst at Nomura.

"The days of catalyst-driven shopping have stretched," he says. "When you need to attract shoppers with something other than product, you use price and time."

Siegel says that means retailers are offering steeper discounts and for longer periods of time to try to get customers in the door. His research shows Gap has been offering higher discounts and longer promotional periods through July and August than in the comparable weeks last year. And discounts between 30% and 50% have become standard at many retailers.

Still, LoCastro says it pays to wait. DealNews finds the best prices are still at the end of August, when summer clearance and back-to-school promotions converge. LoCastro says that historically, August is one of the best times to buy laptops and apparel.

Meanwhile retailers are stuck serving the whims of millions of shoppers who seem to increasingly hold all the cards when it comes to getting cheap merchandise. Stores have always marked down items to clear inventory, Siegel says. Now they're doing it incessantly out of a need to keep shoppers with hundreds of other options interested, especially during crucial buying seasons like back-to-school.

"The reality is I think they need to do it," Siegel says. "It's somewhat of a prisoner's dilemma."