Carl Icahn, who had been urging Family Dollar to put itself on sale, sold his entire stake in the company for a profit of $200 million. The struggling Family Dollar caught a bid from competitor Dollar Tree for $8.5 billion but has recently received a bid from more similar rival Dollar General for $9.1 billion.
Since stocks that get bids tend to rise, and since Dollar General’s proposal to take over Family Dollar was more generous than Dollar Tree’s, the sale of Icahn’s is startling. Then again, we don’t know the exact timing of Icahn’s sale. There is some indication that a proposal from Dollar General to buy out Family Dollar might involve anti-trust issues, since Dollar General and Family Dollar have more similar merchandise than either of them have to Dollar Tree. Another reason for Icahn’s departure might have been that Dollar General seemed less ready to oust Family Dollar CEO Howard Levine, a chief executive who has received considerable criticism from Icahn.
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Icahn was the largest shareholder of Family Dollar in June, with a stake of 9.4%, which he reduced in July to 3.61%. Nelson Peltz’s Trian fund also owns a considerable stake in Family Dollar, 7.34% of the company.