Family Dollar Stores, Inc. (NYSE:FDO) has responded to Carl Icahn’s call for the company to sell itself as quickly as possible. In Icahn’s letter, he said he met with the discount retail chain’s chairman and CEO, but they had very different views about what was best for Family Dollar. The retail chain posted its response on its website and also filed a copy of it with the Securities and Exchange Commission.
Family Dollar reiterates previous statements
In the company’s response, management acknowledged meeting with Carl Icahn. They said they’re “always open to constructively communicating with our shareholders with the shared goal of enhancing value.”
Family Dollar Stores, Inc. (NYSE:FDO) went on to say that it is conducting a business review to look for ways to strengthen the retail chain’s value proposition, improve efficiencies in operations, and improve financial performance. The company said the review is ongoing but that it continues to “take immediate, strategic actions as appropriate” to improve its performance.
Carl Icahn wants to see a merger
There’s been talk that activist investor Carl Icahn could push Family Dollar Stores, Inc. (NYSE:FDO) into a merger with competitor Dollar General Corp. (NYSE:DG). Dollar General shares ticked slightly higher this morning, jumping as much as 1%. As of the end of the last quarter, Icahn held 1.3 million Family Dollar shares and nearly 9.5 million in-the-money options. That amounted to a 9.4% stake in the discount chain, although the greatest majority of that stake is in the form of options, which means Icahn might never buy any more shares.
While it’s true that a merger of the two companies appears to be the most obvious answer to Family Dollar Stores, Inc. (NYSE:FDO)’s declining numbers, RBC analysts say it isn’t a done deal. In fact, they point out that there’s no evidence that the companies even want to merge. Family Dollar management has certainly expressed their opposition to anything of the sort.
