Dollar Tree (Nasdaq: DLTR) (“Dollar Tree” or the “Company”) today issued the following statement regarding recent interactions with Mantle Ridge and its notice seeking to nominate a full slate of 11 directors to the Company’s Board of Directors at its 2022 Annual Meeting:
“Dollar Tree’s Board of Directors and management team maintain an ongoing dialogue with shareholders and welcome input about the Company’s strategy and performance. We are however disappointed that Mantle Ridge has been unwilling to engage with us constructively and has instead chosen to proceed in such an unwarrantedly aggressive and hostile manner. Mantle Ridge’s overreach in seeking to replace our full Board with its own hand-picked slate -- despite having no ideas or plans to improve on our business or operations -- is not justified nor would it be in the best interests of Dollar Tree shareholders.
“Dollar Tree first heard from Mantle Ridge when it filed a Schedule 13D on November 12 reflecting a significant economic interest in the Company (almost entirely through derivative instruments) and sent a letter to the Dollar Tree Board. In its letter, Mantle Ridge expressed its support of the Company’s multi-price strategy and applauded the Company’s “steady resistance” to calls to dispose of or dismantle Family Dollar, which it agreed “would have been a grave error and enormously value destructive”. Within days, Dollar Tree invited Mantle Ridge to present its ideas for business improvement to the Dollar Tree Board. Mantle Ridge, however, declined all invitations to meet with Dollar Tree unless with the entire Board in person and so waited until the regularly scheduled in-person Board meeting three weeks later. On December 2, the entire Dollar Tree Board met in person for several hours with Mr. Paul Hilal, Mr. Richard Dreiling and three other Mantle Ridge representatives.
“At that meeting, despite repeated requests both in advance of and during the meeting, Mantle Ridge offered no new ideas for how to improve the Company’s performance or operations. The only operational suggestion made – that the Company should sell Dollar Tree merchandise at Family Dollar stores – is something Dollar Tree has already been doing for several years. Instead, Mantle Ridge simply expressed that it wanted a majority of the Board to be replaced, Mr. Dreiling to be named Executive Chairman, and other control rights. Taken together, in the view of the Board, these demands amounted to handing control of the Company to Mr. Hilal and Mantle Ridge.
“After deliberating on that meeting, the Dollar Tree Board sent a letter to Mantle Ridge (the full text of which is set forth below) in which, among other things, it offered to explore a settlement in which Mr. Dreiling would be added to the Dollar Tree Board (and potentially be engaged as a meaningful consultant) and also offered Mantle Ridge a role in the Company’s ongoing Board refreshment program. Continuing Mantle Ridge’s pattern, the Company never heard back from Mantle Ridge until it received the letter nominating its slate to replace the entire Board.
“The Company is on an increasingly strong performance trajectory, based on initiatives it has been pursuing. Dollar Tree remains focused on executing its strategy to drive growth and profitability, and the continued acceleration of its strategic initiatives, including the expanded rollout of its strategic store formats. As previously announced, based on positive customer reaction, the success of its new Combo and Dollar Tree Plus store formats, and thoughtful testing, the Company is adding new price points above $1 across all Dollar Tree Plus stores and will be rolling out $1.25 price point across the majority of its assortment in all legacy Dollar Tree stores by the end of fiscal Q1 2022. This was not a decision the Company took lightly, and required careful planning, including to ensure that it continues to provide a meaningful assortment with extreme value to its customers. Operational performance at converted Dollar Tree stores continues to validate our earlier tests and demonstrates the success of the Company’s strategy and execution.
“The Company’s stock price jumped significantly higher immediately upon the announcement of this major strategic decision, and the Company has received positive feedback from many shareholders since the announcement commending Dollar Tree’s direction. These reactions demonstrate that investors are reacting positively to Dollar Tree’s strategic moves, which are the prime factors for the Company’s recent stock price outperformance.
“Dollar Tree’s Board of Directors and management team have deep industry and operational knowledge in areas highly relevant to the Company’s operations. Further, Dollar Tree’s recently refreshed Board, including a majority of independent directors who were elected since January 2016, has a valuable mix of experience and insights to drive the Company’s strategy and oversee management’s execution. By contrast, most of Mantle Ridge’s hand-picked nominees are drawn from boards of companies at which Mantle Ridge is highly influential, if not in total control, hardly a model of good corporate governance.
“Regardless, the Dollar Tree Board stands ready to engage constructively with Mantle Ridge, even though it is disappointed that, rather than pursuing constructive engagement, Mantle Ridge has chosen to embark on an unwarranted and potentially disruptive proxy contest to replace the entire Board. While the Company would like to avoid an expensive and distracting proxy fight, the Board does not believe that handing control of the Company to Mr. Hilal and Mantle Ridge as it demands is in the best interests of Dollar Tree, its shareholders or other stakeholders.”
The full text of Dollar Tree’s December 7, 2021 letter to Mantle Ridge is below:
Dear Mr. Hilal,
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Greg Bridgeford Lead Independent Director Chair, Compensation Committee
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Stephanie P. Stahl Chair, Nominating, Governance & Sustainability Committee
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Jeffrey G. Naylor Chair, Audit Committee
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Bob Sasser Executive Chairman
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Arnold Barron Independent Director
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Thomas W. Dickson Independent Director
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Lemuel E. Lewis Independent Director
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Winnie Y. Park Independent Director
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Carrie A. Wheeler Independent Director
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Thomas E. Whiddon Independent Director
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Michael A. Witynski President & Chief Executive Officer
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About Dollar Tree, Inc.
Dollar Tree, a Fortune 200 company, operated more than 15,900 retail discount stores in 48 states and five Canadian provinces as of October 30, 2021. Stores operate under the brands of Dollar Tree, Family Dollar and Dollar Tree Canada. To learn more about the Company, visit www.DollarTree.com.
Additional Information
Dollar Tree, Inc. (“Dollar Tree”) plans to file a proxy statement with the U.S. Securities and Exchange Commission (the “SEC”) in connection with its solicitation of proxies for its 2022 Annual Meeting of Stockholders (the “2022 Annual Meeting”). DOLLAR TREE STOCKHOLDERS ARE STRONGLY ENCOURAGED TO READ THE DEFINITIVE PROXY STATEMENT (AND ANY AMENDMENTS AND SUPPLEMENTS THERETO) AND ACCOMPANYING WHITE PROXY CARD AND ANY OTHER RELEVANT SOLICITATION MATERIALS WHEN THEY ARE FILED AS THEY WILL CONTAIN IMPORTANT INFORMATION. Stockholders may obtain the proxy statement, any amendments or supplements to the proxy statement and other documents as and when filed by Dollar Tree with the SEC without charge from the SEC’s website at www.sec.gov.
Certain Information Regarding Participants
Dollar Tree, its directors and certain of its executive officers may be deemed to be participants in connection with the solicitation of proxies from Dollar Tree stockholders in connection with the matters to be considered at the 2022 Annual Meeting. Information regarding the ownership of Dollar Tree’s directors and executive officers in Dollar Tree stock is included in their SEC filings on Forms 3, 4 and 5, which can be found through the SEC’s website at www.sec.gov. More detailed and updated information regarding the identity of potential participants, and their direct or indirect interests, by security holdings or otherwise, will be set forth in the proxy statement to be filed with the SEC. These documents can be obtained free of charge from the sources indicated above.
Cautionary Statements Regarding Forward-Looking Information
This communication may contain certain “forward-looking statements” as that term is used in the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the fact that they address future events, developments and results and do not relate strictly to historical facts. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. Forward-looking statements include, without limitation, statements preceded by, followed by or including words such as “believe,” “anticipate,” “expect,” “intend,” “plan,” “view,” “target” or “estimate,” “may,” “will,” “should,” “predict,” “possible,” “potential,” “continue,” “strategy,” and similar expressions. Although Dollar Tree believes that the expectations reflected in these forward-looking statements are reasonable, these statements are not guarantees of future performance and involve risks and uncertainties, which are subject to change based on various important factors (some of which are beyond Dollar Tree’s control). Moreover, new risks and uncertainties emerge from time to time and it is not possible for Dollar Tree to predict all risks and uncertainties that could have an impact on its forward-looking statements. More detailed information about these factors may be found in filings made by Dollar Tree with the SEC, including Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q. Dollar Tree is under no obligation to, and expressly disclaims any such obligation to, update or alter forward-looking statements, whether as a result of new information, future events, or otherwise.
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Contacts
Dollar Tree, Inc.
Randy Guiler, 757-321-5284
Vice President, Investor Relations
Sard Verbinnen & Co
Stephen Pettibone / Andrew Duberstein / Hayley Cook
DollarTree-SVC@SARDVERB.com