Dollar Store Showdown

Stakes heat up in the chase for the best take over and merge deals in dollar stores.
4:45 | 09/06/14

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Transcript for Dollar Store Showdown
Everyone -- -- and new York and the financial markets are coming to a close on Wall Street for today Friday September 5 that the store's stock and -- stock with a store today family dollars. Today the company refused dollar general's nine point one billion dollar offer all because I was afraid of anti trust lawsuits. Instead. Dollar tree -- be taking over even though they had. A lower bitten so here to make some sense out of all the dollars Jeff -- five cents on Friday afternoon. Our mister MacKey before we get into the antitrust thing want to go back to begin their who is buying you know. Well -- dollar tree is going to -- family dollar and -- going to be eight point five billion dollars these are there are basically three dollar stores down. That rule the universe Dollar General who's the big daddy and -- about eighteen odd billion dollars revenue. And then you have Family Dollar dollar tree -- the two smaller siblings about ten billion give or take a peace and so. -- dollar fee which is oddly enough the smallest of the group taken on -- Family Dollar eight point five billion. Dollar General left kind of offering nine point one billion that no one wants I can't speak for -- bright happy just split it if they -- -- Austin. Put it well that's shook his favorite. -- erupt from the have wrecked what is it was a Family Dollar is afraid that accepting dollar general's bid -- costs and anti trust lawsuits why. Well and here's the thing where it gets kind of weird because there's a lot of these dollar stores and so the argument apparently is that. The antitrust regulators look at them and say you know what there are so many of these dollar stores that its anticompetitive. To have. This much -- this this type of merger that's gonna make this dollar store space really have only what would amount to two contenders now. The problem -- that argument of course is that these dollars stores sell really monetize merchandise tubes of toothpaste deodorant toilet paper stuff like that. So to argue that the the FTC. Which has four major airlines in the entire -- states is going to say that -- monopoly pricing power existent and dollar stores. Is sketchy at best it seems like there might be another agenda going on here with Family Dollar. So in other words you can get -- to a toothpaste on is that a dollar store -- at a convenience store at another at a big box stores and. And -- at a 7-Eleven at a Wal-Mart now combined if you took all three of these dollar store chains that we talked about -- be under thirty billion dollars a year in revenue which sounds like a lot they consider. That's a nice day of work for Wal-Mart literally. Wal-Mart -- over a billion dollars a day in the United States alone target does another eighty billion dollars a year so these are tiny company's relative. Two is silent movie industry as a whole and that's leaving aside in the of those convenient store seven elevenths Saturday talk about. So there's some question as to whether or not anti trust as a real problem Dollar General interestingly enough anticipated -- dollar saying. They were worried about anti trust the Dollar General said you know what if this deal doesn't get done. We will give you Family Dollar half a billion dollars a half a billion box if the regulators don't allow us to complete this deal Family Dollar stills that now. Are so it how exactly investors wrecked that nine point one billion dollar rejection to go to the today chart. Go figure right and so it -- family dollar's going lower because. Is they're run by people who think that 7450. In cash and stock -- a better deal than just a Canadian dollars in cash. The -- investors had been -- in the Dollar General sweeten the pot. Family Dollar is is really getting intransigent on this. Now there's cynics out there Carl -- on -- -- was a Family Dollar shareholder who successfully agitated for the company repurchased. They've argued that -- the dollar management wants to entrench itself and they're really at stake and accepting lower bid because it would allow family dollar's management. To still have jobs Dollar General being the bigger acquirer would get rid of all the match -- -- their own people in place. And so they think there's a little self dealing going on at the executive level for Family Dollar. It is questionable that I watch a lot of these deals -- -- I've played little retail quite a bit. I -- and -- the entire antitrust argument to be questionable at best. Dollar General making a superior offer its all cash over 600 million in additional dollars -- eighty bucks a share which is actually higher than 7450. It's hard to justify this rejection. But -- dollar general's options are a little bit limited because at this point they can take to the shareholders for a vote that's a very expensive lengthy and disruptive process. -- head scratch your but making it rain with lots of dollars today Jeff -- forgot -- finance Jeff thank you very much sir have a great weekend. You do what you don't want to store stocked with abcnews.com for latest headlines I'm -- Cutler and New York.

This transcript has been automatically generated and may not be 100% accurate.

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