Family Dollar's board of directors has unanimously rejected a takeover bid from a New York hedge fund. The offer from the Trian Fund had put the Charlotte-based company's value at $6.99 billion.
The discount retailer's stores have thrived during the U.S. economic slump, as consumers looked for cheaper prices. Over the past three years, Family Dollar's stock price has risen by more than 150 percent.
The publicly held company is led by the same family that opened the chain's first store, in 1959.
Greg Collard of WFAE in Charlotte reports:
The board unanimously rejected an offer from a New York hedge fund. Trian Fund Management offered $55 to $60 a share. That's more than Family Dollar's current stock price, which has been hovering in the low 50s.
Still, the company says the offer is not in the best interest of shareholders. Chairman and CEO Howard Levine says Family Dollar's profitability shows its business plan is working.
The hedge fund is Family Dollar's largest shareholder, with about 8 percent of the company's stock.
Family Dollar says that there are more than 6,800 of its stores now operating in 44 states. As part of its rejection of the Trian offer, the company also adopted a "poison pill" plan to dilute shares in the event of an unwelcome takeover.
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