Dollar General Gets Antitrust Advice From New FTC Recruit
NEW YORK ( TheStreet) -- Dollar General
Feinstein's support of Dollar General's antitrust analysis and his resume convey the seriousness of the company's revised bid for Family Dollar, and are being used to undermine remaining objections related to antitrust. However, the ex-antitrust regulator is so fresh from the FTC he won't be able to argue in front of the commission on behalf of his newest client.
Feinstein was director of the FTC's Bureau of Competition for a four-year stint that ended last June and he remains subject to a two-year cooling-off period. While a so-called "revolving door" between Washington and large corporations is commonplace, it is rare in large merger efforts that a company so publicly uses an independent counsel with close regulatory ties as a deal-making pressure point.
Dollar General is trying to remove antitrust as an issue that keeps Family Dollar from the bargaining table. On Tuesday, the company revised its bid for Family Dollar, offering $80 a share in cash for the discount retail chain and antitrust concessions including a $500 million reverse break-up fee and the divestiture of up to 1,500 stores if ordered to do so by the FTC. Family Dollar is reviewing the offer, but continues to recommend a $74.50 a share cash and stock merger with Dollar Tree that it says carries lower antitrust risk.
With Dollar General's new bid in hand, it may be harder for Family Dollar to continue putting off merger discussions and Feinstein may serve as an anchor for antitrust arguments. In a Tuesday letter to Family Dollar's board of directors, Dollar General CEO Rick Dreiling highlighted Feinstein's ties to the FTC:
[W]e have engaged Richard Feinstein of Boies, Schiller & Flexner LLP to independently review our thorough antitrust work. As you may know, until June of 2013 Mr. Feinstein was the Director of the Bureau of Competition at the FTC. After a review of our work completed to date, Mr. Feinstein has informed us that he concurs in our view that the transaction can be completed on the terms previously proposed.
Given our advisors' experience, as well as the extensive analysis we have performed, we have the highest confidence that our antitrust analysis and conclusions are correct. This leads us to believe that perhaps Family Dollar's advisors are analyzing this transaction as if it were a potential grocery store merger or utilizing data that tells a story much different than Dollar General's documents and data.