Family Dollar Stores Monday adopted a one-year “poison pill” triggered by a 10% stake two days after Carl Icahn reported a 9.39% stake in the company Friday. Icahn is now the company’s largest stakeholder.
Icahn often increases his stakes in companies in order to push for mergers, acquisitions, and/or leadership changes. In this case, he has said he may push for a sale to Dollar General.
Family Dollar said Monday that the move is to buy time, not necessarily to prevent a takeover.
Family Dollar is in the midst of closing stores and executing a restructuring plan as it struggles to compete against competitors like Dollar General and Dollar Tree in the discount-merchandise market. Some observers believe that activist investor Carl Icahn may have the right idea, as a sale to Dollar General could help Family Dollar clean up its act.