Icahn Further Cuts Stake in Family Dollar (FDO)

Billionaire Carl Icahn has lowered again his stake in Family Dollar Stores Inc (FDO), two days after the company agreed to be acquired by rival discount chain Dollar Tree Inc (DLTR) in an $8.5 billion cash-and-stock deal.

The activist shareholder, who had threatened a proxy war against the struggling deep-discount retailer if it did not put itself up for sale, disclosed in a regulatory filing on Wednesday that he lowered his stake in the company to 3.61% from 6.03%. This comes on top of yesterday’s disclosure of a reduction to 6.03% from nearly 9.4 percent.

Mr. Icahn is said to have made $174 million in paper profits on the merger. Not bad for a position he has held for less than two months. Mr. Icahn paid an average of $58.20 a share for his position, which he began accumulating in April. According to the regulatory filing, he sold shares at an average of $75.50 each.

In a statement on Monday, the activist investor said:

“While we continue to believe there are a handful of potential buyers who could realize greater synergies through a combination with Family Dollar and are hopeful that one or more of them will surface as a result of today’s announcement, we are extremely pleased with Dollar Tree’s intention to acquire Family Dollar.”

FDO shares were trading largely unchanged at $75.15 in extended trading.

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