Dollar Tree proposes settlement talks with activist investor Mantle Ridge By Reuters


© Reuters. PHOTOGRAPHY: Products on display at Dollar Tree discount store in Garden City, New York, USA, May 23, 2016. REUTERS / Shannon Stapleton

Author: Svea Herbst-Bayliss

BOSTON (Reuters) – Dollar Tree said Sunday it has offered to investigate a settlement with Mantle Ridge and hand over a board seat to a former executive director of a rival retail chain, saying the activist investment firm’s decision to seek control of its board was “unjustifiably aggressive.”

Dollar Tree (NASDAQ 🙂 publicly reacts to Mantle Ridge’s decision late Friday to nominate 11 directors and replace the entire board, as well as encourage the company to hire Richard Dreiling, a former CEO Dollar General Corp. (NYSE :).

The company said it had contacted an investment firm, which owns 5.7% of its ordinary shares, with suggestions on how to reorganize management. He was willing to add Dreiling as a board member, and perhaps as a consultant.

Mantle Ridge would also have the right to vote in choosing another board member, Dollar Tree said.

But Mantle Ridge did not respond to suggestions, the company said, noting that “it never received a response from Mantle Ridge until it received a letter nominating its list to replace the entire board.”

Mantle Ridge, run by Paul Hilal who honed his credentials as investor investor in Pershing Square Capital Management William Ackman, said in a submission Friday that the company will benefit from a refreshed management.

Dollar Tree on Sunday objected that Mantle Ridge, which traditionally invests in only one company at a time and successfully advocates for change in rail CSX (NASDAQ 🙂 and food service company Aramark, is coming without a plan or new ideas.

Hilal and Mantle Ridge simply proposed changes to the board and executive ranks and wanted Dreiling to be appointed executive chairman, Dollar Tree said. “The breadth and depth of change you are proposing would be very devastating and destructive in value,” Dollar Tree wrote in a letter to Hilal in a statement released Sunday.

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

Dollar Tree said it was still willing to work constructively with Mantle Ridge, but warned that “ceding control of the company” to Hilal and Mantle Ridge was not in the best interests of Dollar Tree, its shareholders or other stakeholders.

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