Family Dollar Adopts Poison Pill After Ichan Pick Up Stake

(RTTNews) - Family Dollar Stores Inc. (FDO) rose 14 percent on the NYSE after the discount retailer on Monday adopted a one-year poison-pill strategy that has a 10 percent ownership limit.

The retailer adopted the shareholder rights plan two days after activist investor Carl Icahn disclosed that his company Icahn Capital LP has acquired stake of about 9.4 percent in Family Dollar.

All of the directors, except Edward Garden, voted in favor of the adoption of the rights plan, which Family Dollar said was not to "prevent an offer to acquire the company, but rather to allow the Board adequate time to consider any and all alternatives."

Icahn Capital had said on Friday 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 conduct talks with the board of Family Dollar to discuss its strategies to enhance shareholder value.

Family Dollar, in a statement on Friday had said, "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."

FDO is currently trading at $68.78, up $8.25 or 13.63%, on a volume of 8.6 million share, above the three-month average volume of 1.8 million.