Edward Garden, son-in-law of billionaire Nelson Peltz whose Trian Fund attempted a hostile takeover of Family Dollar last March, will have a seat on Family Dollar board of directors in exchange for Trian withdrawing its offer to buy the dollar store chain.
Last March, Family Dollar rejected Trian’s $55 to $60 a share bid saying it undervalued the company’s worth. The store’s board instituted a poison pill capping investments to 10%.
‘Great Company with Great Potential’
Trian, which owns 8.29% of Family Dollar, agreed to vote in favor of the company’s board nominees for a certain period of time, effectively ruling out a proxy fight.
Trian, which also owns stakes in Tiffany & Co., Wendy’s and Kraft, also agreed not to raise its stake beyond 9.9% , unless authorized by the board.
Family Dollar reported earlier last week that its fourth quarter net income rose 8% as bargain-hunting shoppers spent more stocking up on frequently used items. The company also outlined plans to open 450 to 500 new stores in fiscal 2012, which would be a jump of more than 50% from the number of openings in fiscal 2011.
“Family Dollar is a great company with great potential,” said Garden, Trian’s chief investment officer and a founding partner, said in a statement. “Over the past year, Trian Partners has been engaged in constructive dialogue with Howard Levine (Family Dollar’s ceo) and other members of the Family Dollar management team. We share their view that the strategic initiatives Family Dollar has implemented have significantly improved the company’s operating performance and future financial prospects.”
Family Dollar operates more than 7,000 stores across 44 states.