Dollar General to go hostile with $9.1 billion Family Dollar bid: sources

(Reuters) - U.S. retailer Dollar General Corp is preparing to go hostile as soon as this week in its bid to buy rival Family Dollar Stores, taking its $9.1 billion offer directly to shareholders after being spurned twice by its smaller rival, people familiar with the matter said on Tuesday. 

Dollar General could launch a tender offer for Family Dollar as soon as Wednesday, these people said, asking not to be named because the matter is not public.

Family Dollar, which already has a deal to sell to Dollar Tree Inc for $8.5 billion, has rejected Dollar General's unsolicited approaches citing antitrust risks.

In its most recent offer made last week, Dollar General had added a $500 million break-up fee and increased the number of stores it is willing to sell to get antitrust approval to 1,500 from 700.

Dollar General believes these new terms eliminated the antitrust risk for Family Dollar, people familiar with the matter said. But the rival rejected the sweetened bid, saying it did not give the company sufficient protection.

Representatives for Dollar General declined to comment. Family Dollar could not be immediately reached for comment.

(Reporting by Soyoung Kim, Nadia Damouni and Olivia Oran in New York)