Icahn Pushes for Family Dollar Sale
June 20, 2014,
NEW YORK-Activist investor Carl Icahn has called for an immediate sale of Family Dollar in a letter to Howard Levine, chairman, president and CEO of the dollar-store retailer, which was included in a filing with the United States Securities and Exchange Commission.
Earlier this month, Icahn purchased about 9.4 percent of Family Dollar's stock through affiliate companies. In the letter, in which Icahn referred to discussions during a dinner he had with Levine on June 18, the investor asked that three of his companies' representatives be added to Family Dollar's board of directors right away, who would become part of a newly formed committee that would start the sale process by approaching likely buyers. He also expressed his wish to work "in a friendly and collaborative manner" with Levine to sell the retailer, but that he would take the matter directly the company's shareholders by soliciting for the removal of all of the board's members "if we cannot achieve this collaboratively."
Giving his reasons for why Family Dollar should be sold, Icahn said there would be "significant interest from strategic and financial buyers who could recognize massive synergies from an acquisition of the company." He added that, given the "advantageous stock market and interest-rate environment," now would be an optimal time to sell. He also said "an overwhelming majority" of Family Dollar's shareholders would favor a sale, given the rise in their market value after Icahn made his purchase.
In a statement issued yesterday responding to Icahn's letter, Family Dollar repeated its commitment to "acting in the best interests of the company and our shareholders." The retailer said it is conducting "an in-depth business review" to improve its shareholder value and operations, and "we continue to take immediate, strategic actions as appropriate to improve our performance."