Icahn Buys Into Family Dollar

Activist Investor Carl Icahn has picked up at 9.4 stakes in the discount retail chain Family Dollar Stores, Inc. Taken with the investments of Icahn’s affiliate investors, the total buy is worth 10.7 million shares worth about $266 billion.

“Carl Icahn is not someone who’s taken lightly,” BB&T analyst Anthony Chukumba told Bloomberg. “He has a track record.”

This is not Family Dollar’s first dance with an activist investor, Nelson Peltz made an unsolicited bid in 2011 hoping to attract others to the deal. That deal fell through, possibly because CEO Howard Levine is reluctant to sell his father’s company. The company has struggled in recent years however, beset on all side by competition from large box retailers, other discount chains and online shopping. The chain also seems to be open to Icahn’s input.

“The Family Dollar board of directors and management team are open to dialogue with all shareholders and welcome input toward the shared goal of enhancing value,” the retailer said. “We are taking steps to strengthen our value proposition, increase operational efficiencies and improve financial performance.”

The retailer’s stock rose as much as 12 percent to $68 in late trading after Icahn made the disclosure. Icahn has floated the possibility of merging the chain with the Dollar General Corporation.

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