Nelson Peltz's Trian Reiterates $55-$60/Share Offer for Family Dollar Stores (FDO)
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Nelson Peltz's Trian Funds reiterated their offer for Family Dollar Stores Inc. (NYSE: FDO), which was rejected a short time ago.
In an amended 13D filing with the SEC, Peltz, an 8% shareholder, said that they were disappointed that the company rejected their $55-$60 per share proposal and the Board's adoption of a "poison pill" following their offer.
Peltz said they disagree with the Boards contention that "the Company's strategic plan remains the best way to deliver value."
"We believe that the best way to deliver value for Family Dollar's shareholders is to eliminate the significant performance gap, outlined below, versus Dollar General Corp. (NYSE: DG)," Peltz stated.
Peltz also disagrees with the Board conclusion that the proposal "substantially undervalues the company," noting the offer is in the mid-point of valuation at 14x 2013 EPS estiamtes.
Peltz urged the Board to "reconsider its determination and explore with us a transaction that provides the Company’s stockholders an attractive risk-adjusted return."
"If the Board chooses not to reconsider, management and the Board must raise the level of operational performance within an expeditious timeframe to be in line with that of Dollar General and specifically commit to achieving the same sales per square foot and EBIT margin as Dollar General."
Peltz also stated that characterizing their offer as "conditional" is not accurate. Bank have indicated willingness to provide a minimum of $5 billion in debt financing and the balance of $2-$3 billion will consist of cash.
"We believe our proposal is very attractive to Family Dollar's stockholders. We are prepared to commit substantial resources to complete our due diligence, finalize our financing arrangements and negotiate an acquisition agreement. Of course, our proposal is subject to other customary conditions, including execution and delivery of definitive documentation, receipt of regulatory and third-party approvals, including expiration or termination of the Hart-Scott-Rodino waiting period, approval of Family Dollar’s Board of Directors and receipt of financing."
The SEC filing and complete letter can be found here.
In an amended 13D filing with the SEC, Peltz, an 8% shareholder, said that they were disappointed that the company rejected their $55-$60 per share proposal and the Board's adoption of a "poison pill" following their offer.
Peltz said they disagree with the Boards contention that "the Company's strategic plan remains the best way to deliver value."
"We believe that the best way to deliver value for Family Dollar's shareholders is to eliminate the significant performance gap, outlined below, versus Dollar General Corp. (NYSE: DG)," Peltz stated.
Peltz also disagrees with the Board conclusion that the proposal "substantially undervalues the company," noting the offer is in the mid-point of valuation at 14x 2013 EPS estiamtes.
Peltz urged the Board to "reconsider its determination and explore with us a transaction that provides the Company’s stockholders an attractive risk-adjusted return."
"If the Board chooses not to reconsider, management and the Board must raise the level of operational performance within an expeditious timeframe to be in line with that of Dollar General and specifically commit to achieving the same sales per square foot and EBIT margin as Dollar General."
Peltz also stated that characterizing their offer as "conditional" is not accurate. Bank have indicated willingness to provide a minimum of $5 billion in debt financing and the balance of $2-$3 billion will consist of cash.
"We believe our proposal is very attractive to Family Dollar's stockholders. We are prepared to commit substantial resources to complete our due diligence, finalize our financing arrangements and negotiate an acquisition agreement. Of course, our proposal is subject to other customary conditions, including execution and delivery of definitive documentation, receipt of regulatory and third-party approvals, including expiration or termination of the Hart-Scott-Rodino waiting period, approval of Family Dollar’s Board of Directors and receipt of financing."
The SEC filing and complete letter can be found here.
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