The Goodlettsville-based company will sell stock in the range of $21 to $23 a share and expects to raise $750 million in the public stock offering, according to documents filed with the U.S. Securities and Exchange Commission.
Dollar General was taken private two years ago after private equity firm Kohlberg Kravis Roberts & Co. purchased the retailer for $7.3 billion, giving its shareholders about $22 a share. The purchase was highly leveraged and in a bid to give a return to its investors, KKR is taking the company back public, analysts said.
But the stock may not be priced low enough for investors to want to buy it, said Nick Einhorn, a research analyst at Greenwich, Conn.-based Renaissance Capital.
"With the market that we're in, investors are sensitive to valuation," Einhorn said. "The stock doesn't appear to be giving much of a discount (compared) to some of its peers."
Dollar General has outperformed other dollar store chains during the recession, analysts said. The company reported net income at $93.6 million in the second quarter of 2009, up from $27.7 million last year. Sales for the same period rose 11.2 percent compared with a year ago, the company said.
"We think it will definitely be well received, given how well the dollar store industry has done," said Morningstar equity analyst Zoe Tan. "We think it is perfect timing."
Dollar General declined to comment.
Wendy Lee can be reached at 615-259-8092 or wlee@tennessean.com.
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