NEW YORK -- Family Dollar Stores received a buyout offer on Tuesday from a New York hedge fund at $55 to $60 per share, a 36% premium over yesterday’s closing price. The offer, which values the company at up to $7.6 billion, was made by Trian Group, which is headed by activist investor Nelson Peltz.The offer, which values the company at up to $7.6 billion, was made by Trian Group, which is headed by activist investor Nelson Peltz.
Trian Group has been accumulating shares of the discount retailer in recent months, and Peltz has met with management to discuss ways to boost its performance.
On Tuesday, the company contacted Family Dollar chairman and CEO Howard Levine to say it owned 8% of the outstanding shares and to make the offer. Trian Group offered Levine the opportunity to participate as an investor with the hedge fund.
Trian Group also urged Family Dollar to form a committee of independent directors to consider the offer, but noted the ultimate decision of whether Family Dollar should be sold should be determined by shareholders, the hedge fund says.
Family Dollar confirmed late Tuesday that it received the offer. It said its board will review the proposal “in due course” with its financial and legal advisors, Morgan Stanley and Cleary Gottlieb Steen & Hamilton LLP.