Dollar Tree (DLTR) stock soared 5.63% in pre-market trading on Wednesday, following reports that the company is nearing a sale of its Family Dollar business for approximately $1 billion. The Wall Street Journal, citing people familiar with the matter, reported that Dollar Tree is close to finalizing a deal with a consortium of private-equity investors.
According to the report, the discount-retail chain is set to be acquired by Brigade Capital Management and Macellum Capital Management. The sale, which is expected to be announced later Wednesday morning alongside Dollar Tree's quarterly results, marks a significant development for the company that has been exploring options for its Family Dollar business since June last year.
This potential divestiture comes as Dollar Tree grapples with increasing competition from big-box retailers like Walmart and online giants such as Amazon, Shein, and Temu. The sale of Family Dollar, which Dollar Tree acquired in 2015 for about $9 billion, could provide the company with additional resources to focus on its core business and navigate the challenging retail landscape. Investors appear to be reacting positively to this strategic move, as reflected in the pre-market stock surge.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.