Family Dollar adds executive from Trian Fund Management to its board as part of an agreement that limits the firm's stake in the discount retailer following failed US$7B bid for the company

MATTHEWS, North Carolina , September 30, 2011 () – Family Dollar Stores Inc. has added a Trian Fund Management LP executive to its board as part of an agreement that limits the firm's stake in the discount retailer following a failed bid for the company.

The retailer said Thursday that it has added Edward Garden, chief investment officer and a founding partner of Trian, to its board.

Family Dollar rejected the $7 billion takeover bid by the investment firm led by investor Nelson Peltz in March. The company said the bid wasn't in the best interests of its shareholders and it adopted a shareholder rights plan, commonly called a "poison pill," that would significantly dilute shares in a takeover attempt.

As part of the agreement disclosed Thursday, Trian agreed not to increase its holdings in Family Dollar above 9.9 percent and vote in favor of the company's board nominees for a period of time. Trian now holds about 8 percent of the retailer's stock.

"Family Dollar is a great company with great potential," Garden said in a statement. "Over the past year, Trian Partners has been engaged in constructive dialogue with Howard Levine and other members of the Family Dollar management team. We share their view that the strategic initiatives Family Dollar has implemented have significantly improved the company's operating performance and future financial prospects."

The addition of Garden, 50, brings the size of the company's board to 11.

Family Dollar reported Wednesday that its net income rose 8 percent as shoppers spent more stocking up on frequently used items. The company also outlined plans to open 450 to 500 new stores in fiscal 2012, which would be a jump of more than 50 percent from the number of openings in fiscal 2011.

Family Dollar, based in Matthews, N.C., operates more than 7,000 across 44 states.

Shares of the company fell $2.89, more than 5 percent, to $50.42 in afternoon trading.

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