Matthews, N.C. — Family Dollar Stores has adopted a one-year shareholder rights plan to prevent investors from gaining sizable control of the company. The move follows the disclosure on Friday that activist investor Carl Icahn has amassed a 9.39% stake in the retailer over the past two months, making him its largest shareholder.
In the filing on Friday, Icahn said he plans to push Family Dollar management to explore strategic changes, and that he might also seek board seats.
All of the company’s directors voted in favor of the adoption of the rights plan, other than Edward Garden who voted against it.
The plan, which has a 10% trigger, is not designed to prevent an offer to acquire the retailer, but to allow its board "adequate time to consider any and all alternatives," the company stated on Monday.
“We are committed to driving value for all Family Dollar shareholders and will continue to take actions to achieve this important objective,” the company said. lcahn told Reuters on Monday that the poison pill is a 'quintessential example' of attorneys 'simply earning fees.' He added that the poison pill 'puts a damper' on prospects for a 'friendly dialogue' with Family Dollar executives.