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Dollar Tree proposes settlement talks to activist investor Mantle Ridge

12/12/2021 | 06:08pm EDT
Products are seen on display at a Dollar Tree discount store in Garden City, New York

BOSTON, Dec 12 (Reuters) - Dollar Tree said on Sunday it offered to explore a settlement with Mantle Ridge and hand a board seat to a former chief executive of a rival retailer, saying the activist investment firm's decision to seek control of its board is "unwarrantedly aggressive."

Dollar Tree is reacting publicly to Mantle Ridge's decision late on Friday to nominate 11 directors and replace the entire board as well as push the company to hire Richard Dreiling, a former CEO of Dollar General Corp.

The company said it reached out to the investment firm, which owns 5.7% of its common stock, with suggestions on how to overhaul the board. It was ready to add Dreiling as a board member and possibly also as a consultant.

Mantle Ridge would also have been given a say in selecting another board member, Dollar Tree said.

But Mantle Ridge failed to respond to the suggestions, the company said, noting it "never heard back from Mantle Ridge until it received the letter nominating its slate to replace the entire Board."

Mantle Ridge, run by Paul Hilal who honed his credentials as an activist investor at William Ackman's Pershing Square Capital Management, said in Friday's filing that the company would benefit from a refreshed board.

Dollar Tree on Sunday countered that Mantle Ridge, which traditionally invests in only one company at a time and has successfully pushed for changes at railroad CSX and food services company Aramark, came with no plan or new ideas.

Hilal and Mantle Ridge simply proposed changes in the board and executive ranks and wanted Dreiling to be appointed executive chairman, Dollar Tree said. "The breadth and depth of the changes you suggest would be very disruptive and value destructive," Dollar Tree wrote in a letter to Hilal that it made public on Sunday.

A representative for Mantle Ridge did not immediately respond to a request for comment.

Dollar Tree said it is still ready to engage constructively with Mantle Ridge but warned that "handing control of the company" to Hilal and Mantle Ridge is not in the best interest of Dollar Tree, its shareholders or other stakeholders.

(Reporting by Svea Herbst-Bayliss; editing by Diane Craft)

© Reuters 2021
Stocks mentioned in the article
ChangeLast1st jan.
ARAMARK -0.03% 33.63 Delayed Quote.-8.74%
CSX CORPORATION -0.51% 33.26 Delayed Quote.-11.09%
DOLLAR GENERAL CORPORATION 0.79% 234.17 Delayed Quote.-0.70%
DOLLAR TREE, INC. 1.29% 161.45 Delayed Quote.14.89%
LOWE'S COMPANIES, INC. 0.38% 194.73 Delayed Quote.-24.95%
PERSHING SQUARE HOLDINGS, LTD. 0.63% 32 Real-time Quote.-22.63%
TREE HOLDINGS LIMITED 0.00% 0.83 Delayed Quote.-4.60%
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Analyst Recommendations on DOLLAR TREE, INC.
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Financials (USD)
Sales 2023 27 887 M - -
Net income 2023 1 790 M - -
Net Debt 2023 2 573 M - -
P/E ratio 2023 20,3x
Yield 2023 -
Capitalization 36 344 M 36 344 M -
EV / Sales 2023 1,40x
EV / Sales 2024 1,32x
Nbr of Employees 136 226
Free-Float 98,6%
Duration : Period :
Dollar Tree, Inc. Technical Analysis Chart | MarketScreener
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Technical analysis trends DOLLAR TREE, INC.
Short TermMid-TermLong Term
Income Statement Evolution
Mean consensus OUTPERFORM
Number of Analysts 26
Last Close Price 161,45 $
Average target price 161,23 $
Spread / Average Target -0,14%
EPS Revisions
Managers and Directors
Michael A. Witynski President, Chief Executive Officer & Director
Kevin S. Wampler Chief Financial Officer
Richard W. Dreiling Executive Chairman
James A. Paisley Chief Information Officer
Thomas R. O’Boyle Chief Operating Officer
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