Family Dollar Stores, Inc. (FDO)’s Takeover By Dollar Tree, Inc. (DLTR): Nelson Peltz Supports Merger; To Gain $368 million From Investment

As the news about the Dollar Tree, Inc. (NASDAQ:DLTR)‘s takeover of Family Dollar Stores, Inc. (NYSE:FDO) have emerged, everybody turned their attention to the biggest winners from this deal. Two of them are Nelson Peltz, the manager of Trian Partners, and Carl Icahn, the manager of Icahn Capital. Peltz and Trian have initiated their position in Family Dollar Stores, Inc. (NYSE:FDO) in July 2010 and have slowly built it to 8.36 million shares or 7.34% of the common stock. Some estimates show earnings of $368 million for Trian and Peltz on their investment in Family Dollar.

In a recent filing with the Securities and Exchange Commission, Trian Partners has disclosed a voting agreement to support the takeover of Family Dollar Stores, Inc. (NYSE:FDO). Trian was pushing for the company to be sold back in 2010, but the attempts were unsuccessful. The fund had also failed to take the company over themselves for $60 per share in 2011. Following this attempt, Trian’s co-founder, Edward Garden, joined the company board and has played a major role in getting Family Dollar Stores, Inc. (NYSE:FDO) to sell itself this time.

“By joining with Dollar Tree, Family Dollar is becoming part of a stronger organization that will drive significant value for shareholders of both companies. Trian is fully supportive of this combination and has entered into voting agreement in support of the merger,” Trian said in a statement.

News of the takeover broke yesterday, July 28th, before the opening bell. Dollar Tree, Inc. (NASDAQ:DLTR) agreed to buy Family Dollar Stores, Inc. (NYSE:FDO) for $8.5 billion in a cash-and-stock deal. This gives Family Dollar shares a deal price of $74.50 apiece, which represents a premium of 23% over the Friday closing price. Family Dollar shareholders will get $59.60 in cash and $14.90 equivalent in Dollar Tree stock for each share.

Icahn has only recently started his “raiding voyage” and is set to gain $188 million. During the past two months, Icahn has built a 9.4% stake in the company, making him the largest outside investor. Other hedge fund managers that are set to win big from this deal are John Paulson, who holds 6.47 million shares, and Natixis Global Asset Management, the manager of Harris Associates with 6.21 million shares.

Disclosure: none.