Dollar Tree settled with Mantle Ridge; Adds Dreiling to board

Key summary: In March 2022, Dollar Tree reached settlement with Mantle Ridge and added seven directors to the Board. In Jan '19, Starboard nominated 7 directors and in Apr '19, it withdrew director nominees.

M.Cap: $31 billion | Dollar Tree, Inc. operates discount variety retail stores in the United States and Canada. It operates through two segments, Dollar Tree and Family Dollar. 

Background:

Mantle Ridge

On December 10, 2021, Mantle Ridge (5.7%) stated its belief that the company would benefit from a refresh of the membership of the Board. In addition, Mantle Ridge believes that the Board should have undertaken a thoughtful and deliberative review of the Company’s strategy, with a view to, among other things, fully develop the combined value of its two primary segments. In furtherance of that objective, Mantle Ridge believes that the Board should have examined closely the possibility of the company’s hiring Richard W. Dreiling (former Chairman and CEO of Dollar General) to a leadership role with the company. It had sent a notice to the corporate secretary of the company of its decision to: (1) nominate eleven individuals as candidates for election to the Board at the 2022 AGM and (2) propose the repeal of each provision of, or amendment to, the By-Laws adopted by the Board without the approval of the stockholders after June 10, 2021 and through the end of the 2022 AGM. Source

Update:

On March 8, 2022, the company reached a settlement with Mantle Ridge and pursuant to it, the company added seven new directors (nominated by Mantle Ridge) to its board including Paul Hilal, founder of Mantle Ridge.  Also, it has appointed Richard Dreiling (former Chairman and CEO of Dollar General) as its executive chairman.

Past

Starboard

• On January 7, 2019, Starboard (1.7%) issued a letter to the President and CEO of the company outlining the opportunities that the Board and management should have pursued in order to unlock value.

  • An exploration of all strategic alternatives for the underperforming Family Dollar business, including an outright sale.

  • An evaluation and initiation of a wide-scale market test of a multi-price point strategy at Dollar Tree bannered stores.

  • Also, it nominated a slate of seven candidates to the Board for election at the 2019 annual meeting of shareholders.

• Also, it nominated a slate of seven candidates to the Board for election at the 2019 annual meeting of shareholders.

Valuation Insight:

“we believe that if Dollar Tree executes the key points of our proposed plan, the Company would be worth as much as $150 per share or more.

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• On April 5, 2019, Starboard withdrew its slate of nominees for election to the Board at the 2019 AGM stating that it was pleased with the company’s decision to test multiple price points at its stores.