Carl Icahn exercises call options on Family Dollar stock
07/02/2014 6:32 PM
07/03/2014 7:40 AM
Activist investor Carl Icahn exercised call options on Wednesday to take ownership of the shares underlying his 9.4 percent stake in Matthews-based Family Dollar.
Icahn, who has called for Family Dollar to be sold and threatened to move to fire the board of directors, previously held most of his stake through options to buy stock rather than actual shares. That changed Wednesday, according to securities filings, when he exercised the options and purchased the underlying shares.
Family Dollar’s stock rose 1.3 percent Wednesday, to close at $65.79 a share.
Icahn spent a total of $622 million to acquire all of the almost 10.7 million shares he now owns, according to securities filings. At Wednesday’s closing price, the shares are worth about $703 million, meaning Icahn has already accumulated paper gains of $81 million.
Family Dollar’s shares have fallen from their high of almost $70 since Icahn announced his stake in the company. If the company’s shares returned to that price, Icahn’s stake would be worth $748 million, giving him a $126 million profit on paper.
Icahn has said the chain needs to be sold because it is under-performing its competitors.
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