Table of Contents
MATTHEWS, N.C. — Family Dollar Stores Inc. has adopted a “poison pill” to limit the influence of activist investor Carl Icahn.
Family Dollar Stores Inc. has adopted a “poison pill” to limit the influence of activist investor Carl Icahn.
The retailer adopted a one-year plan preventing any stockholder from acquiring a stake of more than 10% after Icahn revealed he had become the chain’s largest shareholder, with a 9.39% stake, and said he was contemplating pushing for a merger with Dollar General Corp. Poison pills discourage hostile takeovers with triggers for the issuance of new shares, which weaken the power of shareholders who exceed a set stake.
Icahn, who has a history of acquiring large stakes in companies and then pressuring their boards, said in a government filing that he plans to have a dialogue with Family Dollar’s board and management. He said he wanted to talk about "business and strategies to enhance shareholder value, which may include the pursuit of operating initiatives or the exploration of strategic alternatives."
He later tweeted, "Hope to continue our streak of value enhancement."
The poison pill "puts a damper" on the chance for a "friendly dialogue," Icahn was quoted as saying by Reuters.
The chain said the shareholder rights plan "is not designed to prevent an offer to acquire the company, but rather to allow the board adequate time to consider any and all alternatives."
Icahn responded that whether he owns 10% or 15% of a company is insignificant.
