Carl Icahn criticized the board of directors of Family Dollar Stores, Inc. (NYSE:FDO) for deflecting counter bids in favor of a deal with Dollar Tree, Inc (NASDAQ:DLTR), according to report from Reuters.

Carl Icahn
Carl Icahn image via FBN

The activist investor emphasized that the actions of the board of Family Dollar Stores, Inc. (NYSE:FDO) led to more than $300 million unnecessary breakup fees to Dollar Tree, Inc. (NASDAQ:DLTR).

Icahn urged Family Dollar Stores, Inc. (NYSE:FDO) to sell itself to Dollar General Corp. (NYSE:DG), but its board approved the $8.5 billion takeover proposal of Dollar Tree, Inc. (NASDAQ:DLTR).

Dollar General’s counter bid

Yesterday, Dollar General Corp. (NYSE:DG) offered to acquire Family Dollar Stores, Inc. (NYSE:FDO) for $8.9 billion to strengthen its position in the market. The company also offered to pay a $305 million in breakup fees owed by Family Dollar in case the deal with Dollar Tree falls apart.

According to Icahn, “This is a quintessential example and a reflection of what is wrong with Corporate America. The Family Dollar board is wasting more than $300 million (in breakup fees to Dollar Tree) in an attempt to chill a competing bid from Dollar General, which would keep Howard Levine out of the company once and for all even though the Dollar General bid would enhance the value of Family Dollar stock.”

Icahn surprised by Family Dollar’s deal with Dollar Tree

Icahn emphasized that he was surprised by the decision of Family Dollar Stores, Inc. (NYSE:FDO) to sell itself to Dollar Tree, Inc. (NASDAQ:DLTR). He raised concern whether the board’s decision has something to do with Dollar Tree’s offer that it would retain Levine as Family Dollar’s CEO after the acquisition.

Icahn criticized Family Dollar’s CEO

In a separate interview with FOX Business, Icahn also criticized Levine as child of a privileged, who does not understand or does not care about the rights of shareholders.

“Listen, his father started the company, and he thinks it’s his. But it isn’t, and he doesn’t know what he’s doing,” said Icahn.

Last June, Icahn acquired a 9.4% stake in Family Dollar Stores, Inc. (NYSE:FDO). According to him, he met Levine after disclosing his stake in the company. Levine rejected a sale to Dollar General Corp. (NYSE:DG).

Icahn said, “He didn’t like the deal because he knew that Dollar General wanted nothing to do with him because he doesn’t know what he’s doing. He tried to get me to sign a confi (confidentiality agreement) so he could tell me his big plans for the company. I wouldn’t because I knew it was a ruse to shut me up.”

Icahn added that Levine told him that he “knows how to handle you activists.” In response to Levine, Icahn said he is not an ordinary activist.

“This guy and his board represent all that is wrong with corporate America,” reiterated Icahn.