Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Ackman Buys Family Dollar Stake, Says It’s an LBO Candidate

Don't Miss Out —
Follow us on:

May 25 (Bloomberg) -- Bill Ackman, the founder of Pershing Square Capital Management known for investing in companies to press for changes, said he invested in Family Dollar Stores Inc. because it’s “very reasonably priced” and may be acquired.

Ackman, speaking today at the Ira Sohn Conference in New York, said it’s a “passive” stake, meaning he’s not going to pressure management.

“It’s a good business, it’s done very well for a long time,” he said. “It’s an attractive LBO transaction,” he added, using the abbreviation for leveraged buyouts.

Family Dollar, a discount retailer based in Matthews, North Carolina, has advanced 10 percent to $54.82 in 2011 after more than doubling during the prior three years. The stock climbed 2.5 percent to $56.19 at 5:15 p.m. New York time in after-hours trading following Ackman’s announcement.

It rejected a takeover offer from Nelson Peltz’s Trian Fund Management LP in March, saying it “substantially” undervalues its business, and adopted a defense to discourage unsolicited offers.

Family Dollar earns a “very attractive return on new stores,” Ackman said. If the company catches up with its rival Dollar General Corp. in terms of margins, “you make a lot of money,” he said.

To contact the reporters on this story: Whitney Kisling in New York at wkisling@bloomberg.net; Joshua Fineman in New York at jfineman@bloomberg.net.

To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.