The announcement of a proposed buyout of Family Dollar Stores, Inc. by Trian Group prompted an investigation on behalf of investors in Family Dollar Stores, Inc. (NYSE:FDO) shares questioning the potential unfairness of the proposed takeover and possible breaches of fiduciary duties.

The investigation by a law firm concerns possible breaches of fiduciary duties by certain officers and directors at Family Dollar Stores, Inc. (NYSE:FDO), Trian Group or any insider arising out of the proposal to sell Family Dollar Stores to Trian Group.

Shares of Family Dollar Stores, Inc. (NYSE:FDO) closed on Tuesday, Feb 15, at $43.96 per share and increased to $55.35 per share in after-hours trading after Family Dollar Stores, Inc. (Public, NYSE:FDO) confirmed that it has received an unsolicited conditional proposal from Trian Group to acquire the Family Dollar Stores, Inc. at a price in the range of $55 to $60 per share in cash, subject to due diligence, financing and other conditions. Family Dollar Stores said its Board of Directors, in consultation with its financial and legal advisors, will review the proposal in due course. Nelson Peltzs investment firm Trian Group, which owns nearly 8% of Family Dollar Stores shares, said in a regulatory filing that Peltz also offered the Family Dollar CEO Howard Levine an opportunity to participate in a company buyout and that also advised Mr. Levine that in their view, the ultimate decision of whether the Issuer should be sold should be determined by the Issuers shareholders

Even though the proposal seems to offer at a buyout price of $55 a premium of 25% to FDOs closing price on February, 15, however, shares of Family Dollar Stores, Inc. (NYSE:FDO) traded as recently as January 3rd as high as $50.28 and during December 2010 as high as $51.07 per share. Based on an unaffected stock price of roughly $51 would leave FDO investors at a buyout price of $55 with only a meager premium of less than 10%. In addition Family Dollar Stores has performed well for its investors in the past. Family Dollar Stores reported an increase in its 52/53week Total Revenue from $6.8billion reported on Sept. 1, 2007 to $7.8billion reported on August 28, 2010. Its Net Income rose over the same time period from $242.85million to $358.13million.

Therefore the investigation monitors the buyout and concerns whether Family Dollar Stores Board of Directors will undertake an adequate and fair sales process to obtain fair and maximized consideration for all shareholders of Family Dollar Stores, Inc. (NYSE:FDO) and specifically breached or will breach their fiduciary duties to Family Dollar Stores, Inc. (NYSE:FDO) shareholder by failing to adequately shop the Company before entering into any transaction.
The investigation concerns also whether Trian Group is underpaying for FDO shares, thus unlawfully harming FDO stockholders. A potential class action lawsuit would seek to maximize the amount of money and information FDO shareholders would receive in a buyout, so the law firm.