By Josh Beckerman
Activist Elliott Management Corp. nominated a slate of seven
candidates to the board of Family Dollar Stores Inc., saying the
existing leadership missed an opportunity to facilitate a bidding
war between Dollar Tree Inc. and Dollar General Corp.
Elliott, which says it has a 4.9% stake in Family Dollar, hadn't
previously disclosed its investment in the retailer. Investors are
required to detail their holdings in securities filings when they
hit 5%.
Family Dollar has repeatedly stuck by its plan to be acquired by
Dollar Tree for about $8.5 billion in cash and stock, spurning an
all-cash $9.1 billion offer from Dollar General.
The investor said its reservations about the company's merger
pact with Dollar Tree "have increased in light of the board's
rejection of Dollar General's clearly superior" bid.
In a short statement, Family Dollar said it would review
Elliott's notice in due course.
Elliott said it was nominating the board slate to protect its
interests as one of Family Dollar's largest shareholders and to
provide Dollar General with "an even playing field" in its
continuing efforts to buy the company. Family Dollar's board
currently has 11 directors, according to its website.
Elliott added some of the events up to and since the signing of
the merger agreement have left it concerned that some members of
the existing board lack the experience needed to garner a better
offer.
Elliott also pointed to a Saturday deadline for shareholders to
nominate directors for consideration at next year's annual meeting,
according to Family Dollar's bylaws.
Among the candidates put forth by Elliott are the former finance
chiefs of CBS Corp. and Textron Corp.-- Fredric Reynolds and Ted
French-- Jonathan Macey of Yale Law School, and Marshall Heinberg,
the former head of investment banking at Oppenheimer & Co.
Family Dollar has cited antitrust concerns in its objection to
Dollar General's offer, as the two chains have similar models, with
a variety of items sold for prices generally under $10. Dollar
Tree, however, mostly sells products for $1.
As for its other recent moves, Elliott has made a takeover bid
for Riverbed Technology Inc. and pushed for data-storage provider
EMC Corp. to spin off its VMware Inc. unit.
Write to Josh Beckerman at josh.beckerman@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires