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Starboard urges Dollar Tree to unload Family Dollar

January 07, 2019 / Daphne Howland
SHARESHARESHARE

Starboard Value LP, which owns about 1.7% of Dollar Tree's outstanding shares, on Monday said that it has delivered a letter to Dollar Tree President and CEO Gary Philbin, Executive Chairman Bob Sasser and the dollar store retailer's board of directors urging action on its Family Dollar unit, whose "underperformance .since the acquisition has persisted long enough." The activist investor in its letter said Dollar Tree is "deeply undervalued" and must "explore all strategic alternatives" for its straggling banner, (which it acquired in 2015 for $8.5 billion), including possibly selling it outright. "Unfortunately, Dollar Tree significantly overpaid for Family Dollar, and this business is proving to be a meaningful distraction," according to the letter. Starboard also challenged Dollar Tree's dedication to its everything-a-dollar pricing, which most dollar stores (including Dollar General and its own Family Dollar) have abandoned.