Trian Fund Sells Some Family Dollar (FDO) ~ market folly

Tuesday, July 17, 2012

Trian Fund Sells Some Family Dollar (FDO)

Nelson Peltz's Trian Fund Management was the largest institutional holder of Family Dollar (FDO) shares at the end of the first quarter.  However, according to a recent Form 4 filed with the SEC, Trian has sold some shares.

Per the SEC filing, Trian's co-manager Ed Garden (who sits on FDO's board) sold 597,000 shares at prices between $69.75 and $70.71 on July 10th and 11th.  After these sales, Trian was left owning 9,369,201 shares.  We've posted up the firm's thoughts on FDO in Trian's Q1 letter.

Readers who have followed this name will recall that Trian actually made a bid to take the company private at $60 per share.  Many assumed this was posturing to induce other bids, which never materialized. 

A few months ago, we highlighted how Bill Ackman's Pershing Square sold out of FDO to allocate capital to more compelling opportunities.  While Trian has sold some shares, it could merely be profit taking as they're up on their position.

At the end of the first quarter, Family Dollar counted numerous institutional firms as top shareholders, including: Alan Fournier's Pennant Capital, Scout Capital, Dan Loeb's Third Point, Paulson & Co, and many more.  We'll have to wait and see who continues to own FDO when the second quarter filings are released in August.

Per Google Finance, Family Dollar is "operates a chain of more than 7,000 general merchandise retail discount stores in 44 states, providing primarily consumers with a selection of merchandise in neighborhood stores. The Company merchandise assortment includes Consumables, Home Products, Apparel and Accessories, and Seasonal and Electronics. A Family Dollar store is between 7,500 and 9,500 square feet, with an average of approximately 7,100 square feet of selling space."

For more from this investment firm, we've posted up Trian's recent presentation on Lazard.

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