Wedbush Analyst: Family Dollar (FDO) is 'Still in Play' Despite Trian Dropping Offer
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Price: $79.39 --0%
Rating Summary:
0 Buy, 19 Hold, 3 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
0 Buy, 19 Hold, 3 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Wedbush reiterates a 'Neutral' on Family Dollar Stores Inc. (NYSE: FDO) price target of $55.00.
Wedbush analyst says, "Trian founding partner and Chief Investment Officer Ed Garden was appointed for a period of approximately two years. During this period, Trian has agreed to vote for the Board’s recommended Directors. Trian’s directorship is subject to a minimum ownership requirement of at least 3% of outstanding shares – it currently owns 8.29%. Ed Garden commented that Family Dollar’s strategic initiatives have significantly improved its condition, and that he would work to further enhance shareholder value."
"By accepting a position on the Board, Trian dropped its offer to acquire the company and has agreed to cap its ownership at 9.9% for the next two years, effectively representing a self-imposed poison pill. However, should Family Dollar receive any outside tender offers, Trian would still be able to submit a competing bid."
"Although we are at the high end of guidance, we believe upside should be limited given fairly aggressive comp expectations and recent gross margin pressures." (Wedbush FY12 EPS estimate is $3.70 vs. consensus of $3.59)
For more ratings news on Family Dollar Stores Inc. click here and for the rating history of Family Dollar Stores Inc. click here.
Shares of Family Dollar Stores Inc. closed at $53.31 yesterday.
Wedbush analyst says, "Trian founding partner and Chief Investment Officer Ed Garden was appointed for a period of approximately two years. During this period, Trian has agreed to vote for the Board’s recommended Directors. Trian’s directorship is subject to a minimum ownership requirement of at least 3% of outstanding shares – it currently owns 8.29%. Ed Garden commented that Family Dollar’s strategic initiatives have significantly improved its condition, and that he would work to further enhance shareholder value."
"By accepting a position on the Board, Trian dropped its offer to acquire the company and has agreed to cap its ownership at 9.9% for the next two years, effectively representing a self-imposed poison pill. However, should Family Dollar receive any outside tender offers, Trian would still be able to submit a competing bid."
"Although we are at the high end of guidance, we believe upside should be limited given fairly aggressive comp expectations and recent gross margin pressures." (Wedbush FY12 EPS estimate is $3.70 vs. consensus of $3.59)
For more ratings news on Family Dollar Stores Inc. click here and for the rating history of Family Dollar Stores Inc. click here.
Shares of Family Dollar Stores Inc. closed at $53.31 yesterday.
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