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Dollar Tree shares rise after activist investor takes a stake, makes nominations for the board
Dollar Tree Inc. shares rose 3.2% in Monday premarket trading after Starboard Value LP announced its nominations for the retailer's board. Starboard has taken a 1.7% stake in Dollar Tree, valued at about $370 million, and is seeking a majority stake in the 12-person board, according to The Wall Street Journal. "While we appreciate Starboard's investment and will evaluate any suggestions they may have as we would with any investor, we note that Starboard's nominations for a majority of the board were made without seeking any engagement or making any communication to the Company," Dollar Tree said in a statement. "We look forward to the opportunity to engage with Starboard regarding any suggestions they may have, and we will continue to stay close to our shareholders on matters of importance to them and keep taking actions to drive shareholder value." Dollar Tree's shares have tumbled 16.4% over the past year compared with a 7.7% drop for the S&P 500 index . The company says it has added four new independent directors since May 2016. Quo Vadis Capital says Starboard's suggestions to spin off or sell the Family Dollar unit and consider items priced higher than $1 aren't new ideas. "We believe that the company will be very resistant to both of these proposals," Quo Vadis said, adding that there are "very low odds" that Dollar Tree will sell higher-priced merchandise. Quo Vadis says it "probably makes sense" to consider selling Family Dollar if there are private equity buyers, but thinks Dollar Tree's management can improve the chain. "We agree that the market is undervaluing the overall company and that Family Dollar's underperformance is the primary reason," analysts wrote.
https://finance.yahoo.com/m/d75bf7d.../dollar-tree-shares-rise-after.html?.tsrc=rss
Dollar Tree Inc. shares rose 3.2% in Monday premarket trading after Starboard Value LP announced its nominations for the retailer's board. Starboard has taken a 1.7% stake in Dollar Tree, valued at about $370 million, and is seeking a majority stake in the 12-person board, according to The Wall Street Journal. "While we appreciate Starboard's investment and will evaluate any suggestions they may have as we would with any investor, we note that Starboard's nominations for a majority of the board were made without seeking any engagement or making any communication to the Company," Dollar Tree said in a statement. "We look forward to the opportunity to engage with Starboard regarding any suggestions they may have, and we will continue to stay close to our shareholders on matters of importance to them and keep taking actions to drive shareholder value." Dollar Tree's shares have tumbled 16.4% over the past year compared with a 7.7% drop for the S&P 500 index . The company says it has added four new independent directors since May 2016. Quo Vadis Capital says Starboard's suggestions to spin off or sell the Family Dollar unit and consider items priced higher than $1 aren't new ideas. "We believe that the company will be very resistant to both of these proposals," Quo Vadis said, adding that there are "very low odds" that Dollar Tree will sell higher-priced merchandise. Quo Vadis says it "probably makes sense" to consider selling Family Dollar if there are private equity buyers, but thinks Dollar Tree's management can improve the chain. "We agree that the market is undervaluing the overall company and that Family Dollar's underperformance is the primary reason," analysts wrote.
https://finance.yahoo.com/m/d75bf7d.../dollar-tree-shares-rise-after.html?.tsrc=rss
