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Dollar Tree Slips as Feud With Mantle Ridge Goes Public -Breaking

by Mike Robinson

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© Reuters

By Dhirendra Tripathi

Investing.com – Dollar Tree stock (NASDAQ:) traded 1.2% lower Monday after the company’s battle with activist investor Mantle Ridge became public Sunday, suggesting the distraction may last for a while.

Mantle Ridge’s discount retailer suggested settlement negotiations. They called the move “unwarrantedly agresive” and offered to transfer a seat on their board to Richard Dreiling, former chief executive of Dollar General (NYSE:), as requested by the investor. 

“. . .We strongly believe that the breadth and depth of the changes you suggest would be very disruptive and value destructive,” Dollar Tree wrote in a letter to Mantle Ridge’s Paul Hilal on December 7. Hilal was an activist investor in William Ackman’s Pershing Square Capital Management.

On Friday, Mantle Ridge nominated 11 directors to the company’s board while pushing it to hire Dreiling.

Dollar Tree’s market cap is up by around $7 billion since Mantle Ridge’s 5.7% stake became known around a month back. The Wall Street Journal reported the first time about this stake on Nov. 11.

Inflation has put pressure on the margins at this discount chain, changing its model of selling products for less than $1 and stocking them. The company has been forced to sell more of its products above the price.

 

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