Carl Icahn Buys 9.4% Stake In Family Dollar

(RTTNews) - Discount retailer Family Dollar Stores, Inc. (FDO) said Friday that activist investor Carl Icahn's Icahn Capital LP has acquired beneficial ownership of about 9.4% of Family Dollar's common stock.

"The Family Dollar Board of Directors and management team are open to dialogue with all shareholders and welcome input toward the shared goal of enhancing value. As previously announced, we are taking steps to strengthen our value proposition, increase operational efficiencies and improve financial performance. We are committed to driving value for all Family Dollar shareholders and will continue to take actions to achieve this important objective," Family Dollar said in a statement.

In a Schedule 13D filed with the Securities and Exchange Commission, Icahn Capital said it beneficially owns a total of 10,691,011 Family Dollar shares, including options to purchase shares, representing about 9.39% of the company's outstanding shares, based upon the 113,825,215 shares outstanding as of April 5.

Icahn Capital said in the filing that it acquired the shares in the belief that they were undervalued and that it sees great long-term potential in the retail industry. It plans to seek to have talks with the senior management and board of directors of Family Dollar to discuss the company's business and strategies to enhance shareholder value, which may include the pursuit of operating initiatives or the exploration of strategic alternatives. It may also determine to seek shareholder board representation if appropriate, the filing said.

Family Dollar has struggled to perform well in recent quarters. In April, Family Dollar reported forecast-missing second quarter results and announced certain restructuring actions, including job cuts and store closures. The company also trimmed its fiscal 2014 earnings view.

Family Dollar shares, which have traded in a range of $55.64 to $75.29 over the past year, closed Friday's regular trading session at $60.53, up 42 cents, and gained an additional $6.29 or 10.39% in after hours trading.