Icahn demands Family Dollar sale
Matthews, N.C. – Billionaire activist investor Carl Icahn, who recently engaged in a high-profile effort to force EBay to separate its PayPal business, is now demanding that Family Dollar sell itself. Icahn, who recently disclosed he has a 9.4% stake in the discount retailer, sent an open letter to Family Dollar chairman Howard Levine saying that it is imperative the company be put up for sale immediately.
In the letter, Icahn cited reasons including underperforming stock, the likelihood of “significant interest” from entities who would realize “massive synergies” from purchasing Family Dollar, and advantageous stock market and interest rate environment. Inevitable consolidation in the dollar store industry, and what he sees as support from a vast majority of Family Dollar shareholders. Icahn also said he wants three of his representatives added to the Family Dollar board immediately and will take his proposal for a sale directly to shareholders if management doesn’t support it.
“Bringing our proposal for an immediate sale of Family Dollar directly to stockholders will allow them to evaluate the merits of our suggestion and permit them a say in the future of their company, an approach that all responsible fiduciaries should support,” Icahn wrote. “Nevertheless, we view that as a last resort. We welcome an opportunity to engage directly with you and your financial and legal advisors to discuss constructively the merits of our ideas. But time is of the essence. We hope to hear from you shortly.
Family Dollar has already adopted a “poison pill” shareholder’s rights plan in preparation for possible maneuvering by Icahn. In a written response to his letter, the Family Dollar board struck a defiant tone.
“As previously announced the company is undertaking an in-depth business review to identify opportunities to strengthen our value proposition, increase operational efficiencies and improve financial performance,” said Family Dollar. “While this business review is ongoing, we continue to take immediate, strategic actions as appropriate to improve our performance. We are confident that these steps will position Family Dollar to deliver stronger returns for our shareholders.”
Walmart teams up with payLo by Virgin Mobile
Walmart continues to press on the mobile phone front with an exclusive deal with Virgin Mobile. As of Saturday, June 21, Virgin Mobile’s payLo will offer customers domestic unlimited voice or unlimited texting for $20 per month.
For budget-conscious consumers who don’t need a smartphone, payLo offers affordable devices and value-driven monthly plans. Customers who purchase a Kyocera Kona or Samsung Montage in participating Walmart stores or at Walmart.com can choose between two exclusive $20-per-month offers:
- $20 Unlimited Talk (includes unlimited voice and 50 messages)
- $20 Unlimited Text (includes unlimited messaging and 50 minutes of voice)
“The no-contract market continues to grow, most visibly with smartphones, but many customers find value with unlimited plans without the extra bells and whistles,” said Angela Rittgers, VP, marketing, Sprint’s Prepaid Group. “Through this exclusive offering, payLo is providing the best choice in basic wireless for millions of customers.”
In addition to the two $20 exclusive offerings, Walmart customers can also choose the existing $30 Talk & Text plan or the $40 Unlimited Talk & Text plan. Additional minutes, messages and data will be available at existing rates of $0.10/min, $0.15 for text messages, $0.25 for picture messages and $1.50/MB for web access.
Nike appoints new VP of global apparel
Nike has promoted Reenie Benziger to VP of its global apparel business. Benziger moves from her current role as VP/GM of global young athletes.
“Reenie’s deep consumer knowledge and experience in the global apparel industry will continue to position Nike as an innovative brand with consumers,” said Jeanne Jackson, president of product and merchandising.
Carl Grebert, a 17-year Nike veteran, replaces Benziger as VP/GM of global young athletes. Grebert most recently served as VP/GM of Nike Japan.
Nike has also added eBay president and CEO John Donahoe to its board of directors.
“John’s executive management experience in digital commerce, technology, strategic planning, and marketing for a global brand makes him an excellent addition to our board,” said Philip H. Knight, Nike co-founder and chairman. “We look forward to his contributions to expand Nike’s position as the world’s leading athletic brand and industry innovator.”
Donahoe joined eBay in 2005 as president of eBay Marketplaces, responsible for eBay’s global e-commerce businesses, and was appointed president and CEO in 2008. He has also served on the eBay board of directors since 2008. Prior to joining eBay, he was the CEO and Worldwide Managing Director of Bain & Company from 1999 to 2005, and a managing director from 1982 to 1999. Donahoe also serves on the board of directors of Intel Corporation and is a member of the President’s Export Council.