August 4, 2014 (Shareholders Foundation) - An investigation on behalf of investors, who currently hold shares of Family Dollar Stores, Inc. (NYSE:FDO), was announced concerning whether the takeover of Family Dollar Stores, Inc.. by Dollar Tree, Inc at a value of $74.50 per share is unfair to NYSE:FDO stockholders.
The investigation by a law firm concerns whether certain officers and directors of Family Dollar Stores, Inc. breached their fiduciary duties owed to NYSE:FDO investors in connection with the proposed acquisition.
On July 28, 2014, Dollar Tree, Inc. (NASDAQ:DLTR) and Family Dollar Stores, Inc. (NYSE:FDO), announced that they have entered into a merger agreement under which Dollar Tree will acquire Family Dollar in a cash and stock transaction. Under the terms of the transaction, Family Dollar shareholders will receive $74.50 for each share they own, comprised of $59.60 in cash and $14.90 in Dollar Tree stock.
However, given that at least one analyst has set the high target price for NYSE:FDO shares at $79 per share and that NYSE:FDO shares jumped following the takeover news in the open market to as high as $76.76 per share, the investigation concerns whether the offer is unfair to NYSE:FDO stockholders.
In addition, given that Howard R. Levine and Trian Fund Management, L.P. and funds managed by it, which collectively own approximately 16% of the outstanding stock of Family Dollar, have already entered into voting agreements in support of the merger, the investigation concerns whether the Family Dollar Stores Board of Directors undertook an adequate sales process, adequately shopped the company before entering into the transaction, maximized shareholder value by negotiating the best price, and acted in the shareholders' best interests in connection with the proposed sale.
Family Dollar Stores, Inc. reported that its Total Revenue rose from over $7.86 billion for the 52 weeks period that ended on August 28, 2010 to over $10.39 billion for the 53 weeks period that ended on August 31, 2013 and that its respective Net Income increased from $358.13 million to $443.57 million.
Shares of Family Dollar Stores, Inc. (NYSE:FDO) grew from $15.90 per share in early 2008 to as high as $73.34 per share in September 2013.