Billionaire activist investor Carl Icahn has amassed a new 9.4 percent stake in Family Dollar Stores Inc. and will seek talks with the discount retailer’s management and board about ways to boost shareholder value.
Icahn and his affiliates bought 10.7 million shares and options for about $265.8 million, according to a filing Friday with the U.S. Securities and Exchange Commission. He may push for operating changes and ask the company to explore strategic alternatives, as well as potentially seeking board seats, according to the filing.
“Carl Icahn is not someone who’s taken lightly,” said Anthony Chukumba, a New York-based analyst at BB&T who has a hold rating on the stock. “He has a track record.”
Family Dollar has been the subject of takeover speculation since another activist investor, Nelson Peltz, made an unsolicited bid in 2011 in an attempt to attract other suitors. None surfaced. One impediment may be Chief Executive Officer Howard Levine, who has been reluctant to sell the company his father founded. Even so, Family Dollar said earlier this year that it would conduct a business review to seek ways to improve its finances.
Family Dollar rose as much as 12 percent to $68 in late trading in New York after Icahn made the disclosure. The shares had slid 6.8 percent this year.