For Matthews, N.C.-based Family Dollar Stores, May could be one of the biggest months in the discount retailer's 56-year history. Chesapeake, Va.-based Dollar Tree has said it expects its $8.5 billion purchase of Family Dollar to close this month, capping a 10-month takeover drama. But the close has been delayed before, and neither company would comment this week. After Family Dollar shareholders approved the deal in January, the biggest remaining hurdle became regulatory approval from the Federal Trade Commission.
Dollar General said Friday that it's extended its hostile bid for Matthews, N.C.-based Family Dollar until Dec. 31. The $80 per share, all-cash bid had been set to expire at the end of the day Friday. Family Dollar has rebuffed Dollar General's advances, with the company's board of directors turning down Dollar General's bids so far. Instead, Family Dollar's board wants to complete a previously announced acquisition by rival discount retailer Dollar Tree, which the companies agreed to in July. Family Dollar shareholders are set to vote on the Dollar Tree deal Dec. 11 in Charlotte.
Activist investor Carl Icahn said Thursday that he wants to see Family Dollar sold at once, and he told the retailer that he's prepared to seek shareholder support to fire the entire board of directors if he doesn't get his way. Icahn said in a letter to Family Dollar CEO Howard Levine that he wants three seats on the board of directors, which would comprise a new committee tasked with exploring a sale of the company. The letter said Icahn discussed Family Dollar over dinner with Levine on Wednesday night. The two didn't come to any agreement.
Family Dollar has adopted a "poison pill" that could repel any potential hostile takeover attempt by activist investor Carl Icahn. But some analysts say a sale, merger or executive shakeup at the company looks increasingly likely. Icahn said Friday that he has bought 9.4 percent of the company. That means that more than 22 percent of the company's shares are controlled by activist investors, including John Paulson's hedge fund and Nelson Peltz, who tried to buy the company in 2011.
Family Dollar said Thursday that it will close hundreds of stores and trim its workforce to cut costs after profits fell sharply in its most recent quarter. The company has struggled to keep up with its rivals in recent quarters. Thursday's poor financial results could revive speculation that Family Dollar might be a takeover target for a larger retailer. "Our second-quarter results didn't meet our expectations," said chief executive Howard Levine. "We're taking a number of important steps through our immediate strategic actions to improve our operational efficiency and deliver better financial returns."
Charlotte Business Journal by , Staff Writer photo JEN WILSON Family Dollar operates more than 7,200 stores 45 states. Staff Writer- Charlotte Business Journal Email | Twitter Family Dollar Stores Inc. posted a 12.1 percent increase in net income to $124.5 million, or $1.06 per diluted share, for its fiscal quarter ended May 26. It is the 17th straight quarter of double-digit gains in earnings for the discount retailer. In the same period last year, the Matthews-based company earned $111.1 million, or 91 cents per diluted share. Revenue grew 9.6 percent to $2.36 billion in the company’s third