Dollar General said Monday it offered $78.50 a share in cash, or about $8.95 billion, to buy rival Family Dollar Stores Inc., topping Dollar Tree Inc.’s offer for the company three weeks ago.

Shares of Dollar General jumped 11% to $63.90 in recent premarket trading.

The combination of the two discount chains would have about 20,000 stores in 46 states, with sales of more than $28 billion, Dollar General said.

“For Family Dollar shareholders, our proposal is financially superior to the current transaction agreement with Dollar Tree and would provide Family Dollar shareholders with a substantial premium and immediate liquidity for their shares,” Dollar General Chairman and Chief Executive Rick Dreiling said.

Dollar Tree’s $74.50-a-share offer was a 23% premium to Family Dollar’s stock price before that deal’s announcement. Family Dollar’s shares closed at $76.06 Friday and were inactive premarket Monday.

An expanded version of this report appears at WSJ.com.

SOURCE: MarketWatch