Family Dollar Stores, Inc. (NYSE:FDO) Investor Files Lawsuit Against Acquisition By Dollar Tree

If you purchased shares of Family Dollar Stores, Inc. (NYSE:FDO) and currently hold any of those NYSE:FDO shares, you have certain options and you should contact the Shareholders Foundation, Inc.

To have your information reviewed for options and to recieve notifications about this case, please use this form. You may also send an email to mail@shareholdersfoundation.com, or call us at (858) 779-1554.
Company Name(s): 
Family Dollar Stores
Case Name: 
Family Dollar Stores Deal Case 08/08/2014
Case Status: 
Lawsuit Filed
Affected Securities
NYSE: FDO
Lawsuit Overview
Type of Lawsuit: 
Mergers and Acquisition
Date Filed: 
08/08/2014
Summary: 

August 8, 2014 (Shareholders Foundation) - An investor, who currently holds shares of Family Dollar Stores, Inc. (NYSE:FDO) filed a lawsuit in effort to halt the proposed takeover of Family Dollar Stores, Inc. by Dollar Tree, Inc at a value of $74.50 per share.

The plaintiff alleges that the defendants breached their fiduciary duties owed to NYSE:FDO stockholders by agreeing to sell Family Dollar Stores, Inc.. too cheaply via an unfair process to Dollar Tree, Inc

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, the plaintiff claims that the takeover undervalues Family Dollar Stores, Inc. Indeed, at least one analyst has set the high target price for NYSE:FDO shares at $79 per share and NYSE:FDO shares jumped following the takeover news in the open market to as high as $76.76 per share. 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.

In addition, the plaintiff alleges that the process is also unfair to NYSE:FDO investors. In fact, 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.

On August 8, 2014, NYSE:FDO shares closed at $75.74 per share