Family Dollar: Another activist joins the fray, significantly ups pressure on board, mgmt
MKM (following Icahn's disclosure of a 9.4% stake), thinks a sale of Family Dollar will figure prominently in the discussions. They also think Icahn could push for a merger of Family Dollar with DG. While they've long felt such a combination was unlikely, the stores are similar in size and mix and share the same customer demographic While they are not changing our Neutral rating, which is based on our cautious fundamental view, they expect the stock to trade well above our $58 fair value estimate as investors speculate about a possible sale or merger. They continue to like DG and DLTR