Sector Update: Consumer Stocks Mostly Higher Today; Family Dollar Climbs to New Record High Following Dollar General Buyout Bid

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Consumer stocks were broadly higher Monday with shares of consumer staples companies in the S&P 500 rising about 0.6%. Shares of consumer discretionary firms in the S&P 500 were ahead over 0.9%.

In company news, Family Dollar Stores ( FDO ) rose to an all-time high Monday after receiving a $9.7 billion buyout offer from larger rival Dollar General ( DG ), trumping a prior bid by Dollar Tree ( DLTR ) by around 5.4%.

Under DG's offer, FDO shareholders would receive $78.50 in cash for each of their shares, a $4 premium over DLTR's previous bid

"Our proposal is financially superior to the current transaction agreement with Dollar Tree and would provide Family Dollar shareholders with a substantial premium and immediate liquidity for their shares," according to DG CEO Rick Dreiling in prepared remarks.

He also said the deal would create the largest small-box discount retailer in the United States, with nearly 20,000 stores in 46 states and more than $28 billion in yearly sales.

DG anticipates its proposal would generate between $550 million to $600 million in annual cost savings during the first three years after closing. "The expected synergies would be derived from sales growth driven by an improved merchandise offering and store presentation, purchasing and sourcing efficiencies, distribution and transportation optimization and administrative savings," it said.

The deal also is seen boosting DG earnings in the low double-digits on a percentage basis during in the first 12 months after closing, excluding implementation and transaction costs.

FDO shares were ahead about 5% at $79.88 apiece in mid-day trade, earlier climbing to a new, record high of $80.90 a share and extending the stock's 14% rise over the past 12 months. .

DG shares were up nearly 10% at $63.08 each this afternoon after earlier rising to an intra-day high of $64.02 a share. DLTR shares were off nearly 2% today at $54.55 each.

In other sector news,

(-) FN, (-18.5%) Postpones release of Q4, FY14 financial results while its board audit committee investigates whether they are potential violations of the company's accounting policies.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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