By Sruthi Ramakrishnan
(Reuters) - Family Dollar Inc (N:FDO) shareholders voted not to proceed with a vote on an agreed takeover by Dollar Tree Inc (O:DLTR) in the face of a higher hostile bid from Dollar General Corp (N:DG).
Dollar General, the biggest U.S. discount retailer, took its $9.1 billion offer directly to Family Dollar shareholders in September after Family Dollar's board rejected its offer, citing antitrust concerns.
Instead, Family Dollar stuck to its agreement to be bought by smaller rival Dollar Tree for $8.50 billion in cash and stock.
The delay in the vote will give the Federal Trade Commission more time to evaluate the Dollar General offer, Joseph Feldman, an analyst at brokerage Telsey Advisory Group, said.
Family Dollar said the meeting to vote on the Dollar Tree deal would now be held on Jan. 22 after it was determined that there were insufficient votes to approve the deal on Tuesday.
About 72 million shares were voted in favor of the adjournment, with 15 million against.
Dollar Tree declined to comment.
Dollar General extended its tender offer to Jan. 30 from Dec. 31.
"Investors are interested in having a greater hearing of the higher bid by Dollar General," S&P Capital IQ's Efraim Levy told Reuters. "I would have been surprised if voters had accepted the current offer."
The adjournment of Tuesday's meeting — postponed from Dec. 11 — could lead to a higher offer from Dollar Tree, analysts said.
Family Dollar shares were up marginally at $79.38 in late morning trading on the New York Stock Exchange, while Dollar General's shares were up 1.6 percent at $69.76.
Dollar Tree shares were up 1.8 percent at $70.33 on the Nasdaq.
(Additional reporting by Shailaja Sharma in Bengaluru; Editing by Kirti Pandey and Joyjeet Das)