Is Carl Icahn Surprised With Family Dollar Stores, Inc. (FDO)’s Merger with Dollar Tree, Inc. (DLTR)?

Dollar Tree, Inc. (NASDAQ:DLTR) today announced that will be acquiring Family Dollar Stores, Inc. (NYSE:FDO) in cash and stock, a deal which will unite America’s second and third largest deep-discount retailers. There was speculation on the street that the deal was a result of activist investor Carl Icahn pressuring Family Dollar Stores, Inc. (NYSE:FDO) to sell itself, but the company revealed in a statement that it has been exploring strategic options since the end of last year.

Carl Icahn - Icahn Capital Lp

Wall Street Journal reporter David Benoit talked about the deal and how it really won’t make Carl Icahn happy, on the Fox Business News program, ‘Risk and Reward’.

“I think a lot of people expected this company to be sold, Family Dollar, this has been, a lot of people not just Carl Icahn were pushing for a sale here. But, you are right, Dollar Tree was not usually the buyer people thought would come over. They though Dollar General, kind of the bigger one would scoop down,” Benoit said.

One thing that Mr. Benoit highlighted was, apart from Carl Icahn, Nelson Peltz and his fund, Trian Partners, the hedge fund was holding stakes in Family Dollar Stores, Inc. (NYSE:FDO) since over four years and it doubled its investments, making over $300 million. Nelson Peltz wanted the company sold in 2010 and also offered to buy the company at around $60 per share, but the deal didn’t occur, but his partner, Edward Garden was really instrumental in getting Family Dollar Stores, Inc. (NYSE:FDO) sold this time, Benoit revealed.

“Carl was not really correct in this. He thought Dollar general would get this company, but he actually expressed kind of some disappointment, he called this setback. The Dollar General CEO announced he’d step down because that was kind of a sign recently, this deal wouldn’t happen and Carl was in it for the long haul. So, he got a little surprised, I think, this morning,” Benoit added.


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