Carl Icahn reduced his stake in Family Dollar Stores, Inc. (NYSE:FDO) by more than 2.7 million shares based on his Schedule 13D filing with the Securities and Exchange Commission (SEC) yesterday.

Carl Icahn
Carl Icahn image via FBN

The regulatory filing indicated that Carl Icahn and his affiliates still own 4,115,545 shares or 3.61% of the outstanding shares of Family Dollar Stores, Inc. (NYSE:FDO).

Details of the latest stock sale

On July 30, High River Limited Partnership sold 550,697 shares, Icahn Partners sold 1,308,261 shares, and Icahn Partners Master Fund LP sold 894,529 shares of Family Dollar Stores, Inc. (NYSE:FDO) for $75.27 each.

The shares of Family Dollar Stores, Inc. (NYSE:FDO) are trading $74.89 per share, down by 0.35% at the time of this writing, around 11:40 A.M. in New York.

Carl Icahn’s reason for selling stake in Family Dollar

The activist investor sold around 3.8 million shares of Family Dollar Stores, Inc. (NYSE:FDO) on July 28-29.

Icahn decided to sell a portion of their shares in the discount retailer “after concluding that better returns can be achieved by deploying capital elsewhere rather than waiting either for the Dollar Tree transaction to close or for the possibility of a higher offer to emerge.”

Family Dollar agreed to sell itself to Dollar Tree

Family Dollar Stores, Inc. (NYSE:FDO) agreed to be acquired by Dollar Tree, Inc. (NASDAQ:DLTR) for $8.5 billion or $74.50 per share in cash and stock. The acquisition price represents a 22.8% premium to the closing price of Family Dollar’s stock on July 25.

The combined company is expected to achieve an estimated $300 million in annual run rate synergies by the end of the third-year after the closing of the transaction.

According to Family Dollar Stores, Inc. (NYSE:FDO), the transaction will create a leading discount retailer in North America with more than 13,000 stores in 48 U.S. states and five Canadian provinces. The combined company is expected to generate sales of more than $18 billion.

Icahn demanded the sale of Family Dollar Stores, Inc (NYSE:FDO) when he became its largest shareholder last month. He said the company “consistently underperformed its peers in most, if not all operating metrics.” He emphasized that an immediate sale is necessary.