Icahn unloads more than a third of his Family Dollar shares

Activist investor Carl Icahn has said he hopes a higher bidder for Family Dollar emerges, but he’s not waiting around to see: Icahn has sold more than one-third of his stock in the discount retailer, according to securities filings late Tuesday.

Icahn, who pushed for a sale of Family Dollar, helped egg the share price even higher Monday after Dollar Tree’s announcement that it plans to buy Family Dollar for $8.5 billion, or $74.50 a share. Icahn issued a public statement that said while he was pleased with Dollar Tree’s offer, he hoped to flush out a higher bidder.

Driven by such speculation, which several analysts echoed, traders pushed Family Dollar’s share price above $74.50 at times. Documents filed Tuesday with the Securities and Exchange Commission show Icahn sold 3.8 million shares of Family Dollar on Monday and Tuesday, at prices as high as $75.95 a share. All of his sales were for prices above $74.50, totaling $288 million.

Icahn, who has a net worth of more than $24 billion, said in his filing that he believes his capital can be used more effectively elsewhere.

“The reporting persons (Icahn and his funds) determined to dispose of a portion of their shares after concluding that better returns can be achieved by deploying capital elsewhere rather than waiting either for the Dollar Tree transaction to close or for the possibility of a higher offer to emerge,” the filing said.

Family Dollar declined comment Tuesday on Icahn’s filing.

In pressing for a Family Dollar sale, Icahn claimed that the company was being poorly run and lagged its competitors. He had been the company’s biggest shareholder, controlling 9.4 percent of shares. Now, Tuesday’s filing shows he owns 6 percent of the company’s shares and is down to the third-largest shareholder, behind CEO Howard Levine and activist investor Nelson Peltz.

Icahn’s remaining holdings are worth almost $512 million at Family Dollar’s Tuesday closing price of $74.50 a share.

Under the terms of Family Dollar’s deal, Dollar Tree will acquire the company and keep the Family Dollar name on many of its stores. The combined company would be headquartered in Chesapeake, Va., where Dollar Tree is based. Levine would stay on to run Family Dollar and report to Dollar Tree’s CEO, Bob Sasser.

Family Dollar has said its offices will remain in Matthews, where 1,400 corporate employees work, “for the foreseeable future.”