Market Overview

Family Dollar Up, Hires Morgan Stanley As Advisor Following Icahn Demand

Related FDO
How Wal-Mart Is Disrupting The Dollar Store Space
3 Retail ETFs To Consider Heading Into Year-End Sales
Family Dollar Rejects Dollar General Proposal (Fox Business)

Family Dollar Stores (NYSE: FDO) opened sharply higher and continued to trade up Friday, one day after 9.4 percent stakeholder Carl Icahn demanded an immediate sale.

The company, which confirmed meeting with Icahn, said it's making "an in-depth business review," and hired Morgan Stanley as financial adviser.

With the review underway, "we continue to take immediate actions to improve our performance," the company said. The steps will position the company "to deliver stronger returns for our shareholders."

Despite the drama of Icahn's demands, at least one analyst isn't buying the thesis.

MKM's Patrick McKeever thinks Family Dollar is “better off continuing to pursue lower-risk organic growth” rather than a sale.

Its competitor, Dollar General (NYSE: DG), has likely considered an offer in recent years, but declined to bid "for a number of good reasons," McKeever said in a note.

Icahn said Thursday that without company cooperation he will wage a proxy fight, although he called that a "last resort" and prefers to work cooperatively with management.

Icahn seeks to add three members to the board and have it pursue a sale.

Shares of Family Dollar were last trading at $69.12, up 1.45 percent.

Posted-In: MKM Patrick McKeeverAnalyst Color News M&A Analyst Ratings

 

Related Articles (FDO + DG)

Around the Web, We're Loving...

Partner Network

Get Benzinga's Newsletters