Carl Icahn made a bundle off the sale of Family Dollar — but he didn’t make the deal happen.
The dollar-store chain agreed to sell itself last month to rival Dollar Tree for $8.5 billion — just 52 days after Icahn had taken a 9.4-percent stake in Family Dollar and urged CEO Howard Levine to explore a sale.
Icahn, who has made his fortune prodding companies to sell themselves, called the deal “yet another validation of the activist investment philosophy.”
But Dollar Tree had been in merger talks with Family Dollar since April, before Icahn arrived on the scene, with the conversation already having advanced to the price stage by June, it was revealed in a Monday securities filing.
Indeed, it appears that it is billionaire John Paulson who deserves credit for jump-starting the Family Dollar deal.
New York-based Paulson & Co., which bought nearly 10 percent of the retailer last year, urged Family Dollar to consider a sale in January, according to the Monday filing.
Three days later, Family Dollar met with its banker Morgan Stanley to discuss options, the filing said.
Family Dollar already had been under pressure since 2010 from activist hedge fund investor Nelson Peltz, whose son-in-law now sits on the retailer’s board.
If anything, Icahn’s role in the Family Dollar process may have weakened it.
That’s because Dollar Tree said another bidder it called “Company A” had backed out of the process because of Icahn’s involvement.
Company A — widely presumed to be dollar-store giant Dollar General — was “reluctant to participate in the negotiation of a transaction with Family Dollar if Mr. Icahn were to have a role in or control over the process,” according to the filing.
Dollar Tree, which revealed the timeline of events in a filing to raise funds for its $74.50-a-share Family Dollar bid, likewise also was concerned about Icahn’s involvement with the transaction, but pressed ahead with the deal, according to the filing.