ZEE Business
ZEE BUSINESS
हिंदी में पढ़ें  हिंदी में पढ़ें
Live TV
Live TV
  • Home
  • Personal Finance
    • PPF
    • Mutual Funds
    • Income tax
    • EPFO
    • Income Tax Calculator
    • Personal Loan Calculator
    • Car Loan Calculator
    • Home Loan Calculator
    • SIP calculator
    • SWP Calculator
    • MF Returns Calculator
    • Lumpsum Calculator
  • India
    • Companies
    • Property
    • Startups
    • Uidai
  • Economy
    • Aviation
  • Tech
    • Mobiles
    • Apps
  • Auto
    • Cars
    • Bikes
  • Markets
    • Commodities
    • Currency
  • Railways
  • World
    • Economy
    • Politics
    • Markets
  • videos
  • photos
  • MSME Summit
  • Trending News
    • Viral News
    • Travel
    • People
    • Entertainment
    • Sports
  • More ...
    • VIDEOS
    • PHOTOS
BREAKING NEWS
  • E: Independence Day 2022 - PM Modi Speech From Red Fort - Watch Streaming | KNOW TOP POINTS, IMPORTANT QUOTES
  • Rakesh Jhunjhunwala Akasa Airline: What will happen to India's newest airline - founded by Big Bull?
  • Stock market holiday today: NSE, BSE to stay close on Independence Day; settlement holiday tomorrow
  • Happy Independence Day 2022: How to download, send WhatsApp GIFs, Stickers, Status and more
  • Independence Day 2022: Joe Biden calls India, US 'indispensable partners'
Read in App
Business News » World News

Activist Starboard seeks Family Dollar sale, board changes at Dollar Tree

  • Twitter
  • Facebook
  • Linkedin
  • whatapp
  • View in App

Activist investor Starboard Value LP on Monday called on Dollar Tree Inc to sell its underperforming Family Dollar business and proposed replacing a majority of its board after revealing a stake in the company.

In a statement, Dollar Tree said its board had "the right balance" and did not comment on the fund`s call for a change in pricing strategy or a sale of Family Dollar, which accounts for more than half of the retailer`s 14,000 U.S. stores.

Starboard, one of the best-known funds specializing in forcing boards to make strategic moves to boost shareholder returns, said that Family Dollar was now worth far less than the $8.5 billion the discount store operator paid for it in 2015.

"We believe Dollar Tree should explore all strategic alternatives for Family Dollar, including a sale of the business," Starboard Chief Executive Officer Jeffrey Smith said in a letter to the company.

"The market is likely only ascribing approximately $1 billion - $3 billion of value to Family Dollar based on the current stock price," Smith said.

The purchase of Family Dollar`s roughly 8,000 stores four years ago was aimed at fending off growing competition from Walmart Inc and fellow discounter Dollar General Corp.

Despite re-modeling and sprucing several stores and expanding offerings, same-store sales growth at Family Dollar have been flat on average for the past two years, in contrast to Dollar Tree`s 2.7 percent rise. This has pushed Dollar Tree`s shares down 15 percent over the past year, in contrast Dollar General`s stock has risen 14 percent.

"I personally think they should consider selling Family Dollar," Oppenheimer analyst Rupesh Parikh said as Dollar Tree drives the vast majority of profitability and would get a higher multiple being independent.

Starboard`s intervention is Dollar Tree`s second tryst with activist shareholders after billionaire investor Carl Icahn engineered the sale of Family Dollar to it in 2015.

At the time, Icahn was the largest shareholder in Family Dollar, exiting his stake just after the deal was formally signed.

Starboard on Monday said it had built a 1.7 percent stake in Dollar Tree making it the ninth biggest shareholder in a company controlled mainly by institutional investors.

The hedge fund also proposed to replace seven of the retailer`s 12-member board and urged the company to move away from its strict $1 ceiling for Dollar Tree-branded stores.

"The value that Dollar Tree has offered its customers has deteriorated because of the need to fit everything into a $1 price point. Products today are smaller or of lower quality than they were five, ten, and certainly thirty years ago," Smith said.

Starboard said that if the company accepts its demands, Dollar Tree could be valued at $150 per share.

Dollar Tree shares were up 5 percent at $98.01 in morning trade.

(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)

Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.

TAGS:
Economy
Updated: Mon, Jan 07, 2019
11:15 pm
Reuters
RELATED NEWS
11% growth possible in next decade if India does this, says RBI Deputy Governor Michael Patra 11% growth possible in next decade if India does this, says RBI Deputy Governor Michael Patra
Money Guru: As India gears up for 75th Independence Day celebration, where should you invest for benefit in New India? Expert decodes Money Guru: As India gears up for 75th Independence Day celebration, where should you invest for benefit in New India? Expert decodes
UK economy contracts in 2nd quarter as recession fear grows UK economy contracts in 2nd quarter as recession fear grows
July retail inflation softens to 6.71% from 7.01% in June July retail inflation softens to 6.71% from 7.01% in June
OPEC cuts oil demand forecasts as economic growth slows OPEC cuts oil demand forecasts as economic growth slows

LATEST NEWS

Delhi Traffic Police Advisory for Independence Day: 15 August - Roads to avoid today, timing of closure – full details here

HDFC-HDFC Bank merger gets CCI approval: What next?

Reliance, Nayara face windfall profit tax on local supplies alongside exports

Laal Singh Chaddha box office collection: How Aamir Khan-starrer movie performed on Day 3; know latest update

Rakesh Jhunjhunwala-backed Nazara Tech now a leading gaming company

Google Home app revamp: Tech giant invites suggestions from users - here's how you can participate

Mahindra to unveil electric SUVs on Independence Day 2022; Check when and where to watch live event

Rakesh Jhunjhunwala Akasa Airline: What will happen to India's newest airline - founded by Big Bull?

Happy Independence Day 2022: How to download, send WhatsApp GIFs, Stickers, Status and more

Shareholders approve Ashish Kumar Chauhan appointment as NSE MD, CEO

  • India News
  • World News
  • Companies News
  • Market News
  • Personal Finance News
  • Technology News
  • Automobile News
  • Small Business News
  • Income Tax Calculator
  • Live TV
  • Videos
  • Photos
  • Author
  • Rss Feed
  • Advertise with us
  • Privacy Policy
  • Legal Disclaimer

Latest Trending Updates

  • EPFO
  • Budget 2020
  • Income Tax Return
  • Auto Expo 2020
  • Home Loan
  • Business News

Trending Topics

  • Income Tax
  • income Tax Calculator
  • 7th Pay Commission
  • Reserve Bank of India
  • GST
  • Latest Business News

Follow us on

zeebiz
zeebiz

Partner Sites

  • Zee News
  • Hindi News
  • Marathi News
  • Bengali News
  • Tamil News
  • Malayalam News
  • Gujarati News
  • Telugu News
  • Kannada News
  • DNA
  • WION
© 2022. India Dot Com Private Limited. All Rights Reserved.
LIVE TV