Carl Icahn Discloses Stake in Family Dollar
Carl C. Icahn, the billionaire investor who has taken on the likes of Apple and eBay, has identified a new target: Family Dollar Stores.
Mr. Icahn on Friday disclosed a 9.39 percent stake in Family Dollar, which operates a chain of discount stores, according to a filing with regulators. He intends to try to engage the company's board and management in talks, the filing said, adding that he may also seek board representation 'if appropriate.'
Shares of Family Dollar rose about 9.7 percent in after-hours trading. The company has a market capitalization of about $6.9 billion.
Mr. Icahn sees 'great long-term potential' in Family Dollar's industry and believes the company's 'current situation is analogous' to that of other companies he has invested in, the filing said. Those include CVR Energy, Forest Laboratories, Chesapeake Energy and Biogen.
Family Dollar has been under pressure recently, as its lower-income customers continue to struggle in the aftermath of the recession. The company in January reduced its profit forecast for the year. 'While we have made meaningful progress to improve our execution, our financial performance has not met our expectations,' the chief executive, Howard R. Levine, said in a statement at the time.
In April, the company moved to lower prices on about 1,000 items in its stores and said it would reduce costs through layoffs and hundreds of store closings.
In talks with the company, Mr. Icahn hopes to discuss its 'business and strategies to enhance shareholder value, which may include the pursuit of operating initiatives or the exploration of strategic alternatives,' the filing said.
The stake, composed of stock and options, amounts to 10,691,011 shares. Mr. Icahn began accumulating the shares in April, the filing said.
Mr. Icahn announced the investment on Twitter.
Disclosed a 9% position in FAMILY DOLLAR today. Hope to continue our streak of value enhancement. Read our 13D here: http://t.co/0FKHMSFyAZ
- Carl Icahn (@Carl_C_Icahn) 6 Jun 14
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