Billionaire activist investor Carl Icahn is demanding that Family Dollar be put up for sale immediately. Icahn earlier this month bought a 9.4 percent share in the Matthews-based discount retailer, making him the company’s largest shareholder. Family Dollar’s board immediately enacted a so-called “poison pill” measure to prevent Icahn or other large investors from buying a controlling stake in the company.
In a letter to Family Dollar CEO Howard Levine dated June 19, Icahn demands that three of his representatives be immediately added to the company’s board. If that doesn’t happen, Icahn writes that he will take his proposal directly to stockholders.
Retail analyst Joan Storms of Wedbush Securities says Icahn sees potential in Family Dollar, who has recently underperformed competitor Dollar General. She says last year, Dollar General had sales per square foot of about $220, and Family Dollar’s over the same period were significantly lower, about $165.
In April, Family Dollar announced it would close 370 stores after revenue fell 6 percent in the second quarter. The company has more than 8,000 stores nationwide. The company says in a statement that it shares Icahn’s goal of increasing the company’s value and that it will continue to work with him and other shareholders.