Icahn Discloses Stake in Family Dollar (FDO)

Shares of Family Dollar Stores Inc. (FDO) were up +7.52 or +12.42 percent to $68.05 per share in pre-market trading this morning, after news late Friday that Carl Icahn had disclosed a stake of 9.4 percent in the company. The 13-D filing with the Securities and Exchange Commission made late Friday showed Icahn and several associates had purchased almost 10.7 million shares.

Matthews, North Carolina based Family Dollar Stores Inc. was founded in 1959 and is a discount retailer operating 8100 stores in 46 states. The company sells both national and quality private brands, employs over 50,000 people nationwide and had a net income of $443.6 million on revenue of $10.4 billion in 2013. The 13-D filing showed Icahn and affiliates had purchased 10.7 million shares in Family Dollar stock and options at a cost of $265.8 million. The group began accumulating its stake on April 7th. At $68.00 per share, where the stock is currently trading, the value of the stake has risen to $727.6 million. Icahn, who has had an activist investor role in companies such as Netflix (NFLX), Apple (APPL) and EBay (EBAY) will most likely look to hold seats on the Family Dollarâ s board and will work to enhance the companyâ s return to shareholders. The announcement of Icahnâ s position has already boosted the companyâ s stock price considerably. Family Dollar was the subject of an unsolicited bid by activist investor Nelson Peltz in 2011. Peltz unsuccessfully sought to attract other buyers. With the disclosure of more than 10 percent of the company already under Icahnâ s control, the company is willing to accept the activist investorâ s input. Family Dollar issued a statement in response to the SEC filing on Friday, saying, â

Published on Jun 9, 2014
By Jay Hawk
Jay Hawk
Jay Hawk enjoyed a 12-year professional financial markets career incorporating extensive first hand futures and options experience obtained by trading in the stock, commodity and forex markets on U.S. exchanges. Since retiring as a full-time financial market professional, he has been actively trading stock, commodities, forex and options for his own account and managing funds for others, as well as writing financial market commentary and educational articles.

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