Elliott Increases Stake In Family Dollar Stores to 6.8 Percent

Elliott Increases Stake In Family Dollar Stores to 6.8 Percent
By World Economic Forum (Flickr: The Global Financial Context: Paul Singer) [CC BY-SA 2.0], via Wikimedia Commons

Elliott Associates and its affiliates increased its stake in Family Dollar Stores, Inc. (NYSE:FDO) based on its latest 13D filing with the Securities and Exchange Commission (SEC).

The regulatory filing showed that Elliott collectively beneficially owned 7,722,525 shares or 6.8% of the outstanding common stock of Family Dollar Stores, Inc. (NYSE:FDO) as of December 10, 2014.  The investment management firm previously held 4.9% stake in the discount retailer.

Elliott indicated in the filing that it acquired a stake in Family Dollar Stores, Inc. (NYSE:FDO) because of its belief that its stock was Undervalued and represented an attractive investment opportunity.

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Elliott nominated seven director candidates

Last October, Elliott sent a letter to Family Dollar Stores, Inc. (NYSE:FDO) nominating a slate of seven director candidates for election during its annual meeting of stockholders.

According to Elliott, nominating the seven highly-qualified executives to the board of the discount retailer was part of its move to protect its investment. Elliott is one of the largest investors of Family Dollar Stores, Inc. (NYSE:FDO).

The investment management firm said its action will ensure that the company’s board does everything within its power to provide an equal playing field Dollar General Corp. (NYSE:DG) in its continuing effort to acquire Family Dollar Stores, Inc. (NYSE:FDO).

Elliott also emphasized that Family Dollar Stores missed the opportunity to facilitate a bidding war between Dollar General and Dollar Tree, Inc. (NASDAQ:DLTR), which are both well-capitalized strategic acquirers.

ISS urges Family Dollar investors to reject Dollar Tree’s offer

Institutional Shareholder Services (ISS), a proxy advisory firm urged the investors of Family Dollar Stores, Inc. (NYSE:FDO) to reject the takeover offer of Dollar Tree, Inc. (NASDAQ:DLTR) and to postpone the December 23 meeting to vote on the deal.

According to the proxy advisory firm, rejecting the current proposal will not jeopardize an eventual with Dollar Tree. ISS also said delaying a decision could result to a higher offer from Dollar Tree or Dollar General, which also submitted a competing bid to acquire Family Dollar.

The shares of Family Dollar Stores, Inc. (NYSE:FDO) were trading $79.68 per share, up by 0.25% at the time of this writing around noon in New York.

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