NEW YORK (TheStreet) -- Shares of Family Dollar Stores (FDO) are surging in pre-market trade, up 11.68% to $67.60, after it was disclosed that Carl Icahn (IEP) has taken a 9.4% stake for $265.8 million in the chain of general merchandise retail discount stores, and plans to push the retailer's management to explore strategic changes, according to a filing late Friday, the Wall Strete Journal reports.
Icahn might also seek board seats.
Icahn joins Nelson Peltz's Trian Fund Management LP, which has 8.4 million shares, or 7.4% of shares outstanding, and Paulson & Co., with almost 6.5 million shares, or a 5.7% stake, the Journal noted.
TheStreet Ratings team rates FAMILY DOLLAR STORES as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate FAMILY DOLLAR STORES (FDO) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income."