Dollar General To Be Taken Private At 31% Premium

| About: Dollar General (DG)

Dollar General Corp., which has the most stores (8,260 as of March 2) of any retailer in the U.S., said this morning it has agreed to be acquired by Kohlberg Kravis Roberts & Co. private equity group for about $7.3 billion. KKR will pay $22/share in cash, and will also assume about $380 million in debt. The price Dollar General 12 03 2007 Chartrepresents a 31% premium over Dollar General's Friday close of $16.78. The deal is expected to close in Q3 2007. David Perdue, Dollar General CEO: "Our board of directors firmly believes that this is the right transaction for our shareholders, employees and customers." Michael Calbert of KKR: "Dollar General is an outstanding company with a strong market presence and a rich legacy... we look forward to partnering with the Dollar General team to position the company for future growth." Dollar General shares are up 28% to $21.50 in pre-market trading.

Sources: Press Release, Bloomberg,
Commentary: Is Prudence Passé? Private Equity and LBO Cyclical Sector TargetsJim Cramer's Take on DG
Stocks/ETFs to watch: Dollar General Corp. (NYSE:DG). Competitors: Dollar Tree Stores Inc. (NASDAQ:DLTR), Family Dollar Stores Inc. (NYSE:FDO), Fred's, Inc. (NASDAQ:FRED), Wal-Mart Stores Inc. (NYSE:WMT), 99 Cents Only Stores (NYSE:NDN). ETFs: Retail HOLDRS ETF (NYSEARCA:RTH), SPDR S&P Retail (NYSEARCA:XRT), PowerShares Dynamic Retail (NYSEARCA:PMR)

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