Star­board takes stake in Dol­lar Tree, seeks sale of Fam­ily Dol­lar

The Financial Daily - - INTERNATIONAL -

TEXAS: Ac­tivist in­vestor Star­board Value LP said it had ac­quired a 1.7 per­cent stake in dis­count store op­er­a­tor Dol­lar Tree Inc (DLTR.O) and urged it to ex­plore a sale of its un­der­per­form­ing Fam­ily Dol­lar busi­ness.

The in­vestor also said it was seek­ing to re­place seven di­rec­tors on the re­tailer's 12-mem­ber board, as it took a stake val­ued at about $370 mil­lion in the com­pany.

"We be­lieve Dol­lar Tree should ex­plore all strate­gic al­ter­na­tives for Fam­ily Dol­lar, in­clud­ing a sale of the busi­ness," Star­board's Chief Ex­ec­u­tive Of­fi­cer Jef­frey Smith said in a let­ter ad­dressed to the com­pany's board.

Dol­lar Tree, which sells prod­ucts at $1.00, has been strug­gling to turn around its Fam­ily Dol­lar busi­ness that it ac­quired in 2015 for about $8.5 bil­lion.

The sale of Fam­ily Dol­lar would likely fetch less than the price Dol­lar Tree paid for the busi­ness, Star­board said.

The ac­tivist in­vestor also urged the com­pany to ex­plore and im­ple­ment a mul­ti­ple-pric­ing strat­egy that would be above just $1.00.

The re­tailer did not im­me­di­ately re­spond to a re­quest for com­ment.

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