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EBay, Icahn end dispute

BY Dan Berthiaume

San Jose, Calif. – EBay Inc. has reached an agreement with investor Carl Icahn, ending the proxy contest before the company’s upcoming annual meeting of stockholders. Icahn is withdrawing both his proposal to separate the company’s PayPal business and his two nominees to the company’s board of directors.

The company said it has agreed to Icahn’s suggestion to appoint business executive David Dorman as an independent director to its board of directors. This will expand the number of independent directors to 10 on the 12-member board. The other two directors are eBay founder and chairman Pierre Omidyar, the company’s largest shareholder, and company president and CEO John Donahoe.

Dorman, 60, is a founding partner of Centerview Capital Technology and currently chairman of the board of CVS Caremark Corporation. Dorman was a board member of Motorola Inc. beginning in 2006 and served as chairman of the board from 2008 until 2012. After the separation of Motorola Mobility and Motorola Solutions, Dorman became lead independent director of Motorola Solutions. He also serves on the boards of Yum Brands Inc.

Icahn has signed a confidentiality agreement covering any non-public information that directors and certain officers of the company may share with him. In addition, the company agreed not to adopt a policy precluding such persons from speaking to Icahn, and that it would advise them that they may speak to Icahn if they are willing to do so.

“We are very pleased to have reached this agreement with Carl, settling proxy issues and enabling our board and management team to focus our full attention on a goal every shareholder agrees on – growing PayPal and eBay, and delivering sustainable shareholder value,” said Donahoe.

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Men’s Wearhouse extends tender offer for Jos. A. Bank to April 23

BY Dan Berthiaume

Fremont, Calif. — In accordance with the terms of its merger agreement with Jos. A. Bank Clothiers Inc., The Men’s Wearhouse has extended its all-cash tender offer for $65 per share for all of the currently outstanding shares of common stock (including associated stock purchase rights) of Jos. A. Bank to April 23, unless further extended.

The tender offer was previously set to expire on April 9. As of April 9, approximately 20.6 million shares of Jos. A. Bank common stock have been validly tendered in, and not withdrawn from the tender offer. BofA Merrill Lynch and J.P. Morgan Securities LLC are serving as financial advisors to Men’s Wearhouse, and Willkie Farr & Gallagher LLP is serving as legal advisor.

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Family Dollar makes strategic changes following disappointing Q2

BY CSA STAFF

Family Dollar plans to close 370 underperforming stores, cut jobs and lower prices on 1,000 basic items following a disappointing second quarter, which was adversely affected by the extra week in last year’s quarter, severe weather, holiday promotions and a challenging consumer environment.

The company is also slowing its new store growth beginning in fiscal 2015 to bolster its return on investment. It now anticipates opening 350 to 400 new stores as opposed to approximately 525 stores in 2014.

Net income in the quarter ended March 1 fell 35% to $90.9 million from $140.1 million in the year-ago period. Net sales decreased 6.1% to $2.7 billion, from $2.9 billion. Same-store sales declined 3.8% as a result of decreased customer transactions, partially offset by an increase in the average customer transaction value.

“Our second quarter results did not meet our expectations,” said chairman and CEO Howard R. Levine. “The 2013 holiday season was challenged by a more promotional competitive environment and a more financially constrained consumer. In addition, like many retailers, our second quarter results were significantly impacted by severe winter weather, which resulted in numerous store closings, disrupted merchandise deliveries and higher than expected utility and store maintenance expenses.”

The job cuts and store closures are expected to reduce annual operating costs by $40 million to $45 million beginning third quarter of fiscal 2014.

Looking ahead, the company expects to record an estimated $85 million to $95 million restructuring charge in the second half of fiscal 2014 related to the workforce reductions and store closures.

For the third quarter of fiscal 2014, Family Dollar expects that same-store sales will decline in the low-single-digit range and for the fourth quarter of fiscal 2014, the company expects that same-store sales will be flat to up slightly. Family Dollar also expects a low-single digit increase in net sales during the full fiscal year.

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