Long Term Returns of Nelson Peltz’s 5 Activist Targets

4. Family Dollar Stores, Inc. (NYSE:FDO) 

Activist Investment: 2010
Long Term Returns Since Peltz’s Investment: 124%
S&P 500 Gain Since Peltz’s Investment: 61.4%

Family Dollar Stores, Inc. (NYSE:FDO) is a US-based chain of over 8,000 discount stores that offer brand-name products at low prices. Peltz and Trian Partners initiated a position in the company in 2010 and grew their stakes to 7.34% of the common stock after that. The activist investor declared the company’s share undervalued and discussed possible moves to raise share prices with management.

The strategies discussed include raising sales per square foot and increasing the stock buyback plan. In 2011, Peltz investment firm offered to buy the retailer for at least $7 billion in a deal valued at between $55 and $60 a share, representing a 25% premium.

The deal never materialized as Dollar Tree acquired Family Dollar Stores, Inc. (NYSE:FDO) for cash and stock in a bid worth $8.5 billion. The deal marked a massive victory for activist investor Peltz, who received $1.2 billion for his stakes. Carl Icahn, who had amassed a 9.6% stake, was also a big winner.