Hedge fund Starboard Value LP has dropped its planned proxy battle with Dollar Tree (DLTR - Get Report) after the discount retail chain said it would work with the New York-based activist firm to implement some of its revenue-boosting recommendations.

Starboard on Friday said it had decided to withdraw its nomination of directors at Dollar Tree after the company agreed to test multiple price points in its stores and remain open to other constructive dialogue that may lead to additional sales growth and cost savings.

"We welcome Starboard's announcement and appreciate the constructive engagement and dialogue we continue to have with them and our other shareholders," Dollar Tree said in a statement.

"Dollar Tree's Board and management team are committed to pursuing our announced plan to improve Family Dollar performance and to testing other ways to help deliver sustainable value-creation for shareholders while providing the best possible experience and value for our customers."

HOT OFF THE PRESS! Be sure to check your Sunday paper for our latest ad! https://t.co/6kbUuSPy5j pic.twitter.com/drtDycb1uN

— Dollar Tree (@DollarTree) April 7, 2019

Starboard in January revealed that it controlled a small stake in the retailer and had nominated seven directors - a majority slate - to the company's 11-person board. The firm had recommended Dollar Tree make several significant changes, including adjusting its pricing model to sell items at price points other than $1.

Shares of Dollar Tree declined 1.4% in premarket trading Monday to $104.50.