Dollar General does not want to be involved with Family Dollar, says FBR Capital Amid speculation that Carl Icahn will push for a merger between Dollar General (DG) and Family Dollar (FDO), FBR Capital says it believes Dollar General still does not want to be involved with Family for a "variety of reasons." FBR thinks Dollar General may lever its balance sheet to repurchase shares in order to remove the merger speculation. The firm believes Icahn is likely to ultimately to push for an aggressive share repurchase plan at Family Dollar. FBR adds that Family Dollar does not have the free cash flow to support a leveraged buyout.
Family Dollar April volatility elevated into Q2 and outlook Family Dollar April call option implied volatility is at 31, May is at 14; compared to its 26-week average of 15 according to Track Data, suggesting large near term price movement into the expected release of Q2 results on April 8.