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Bailey McCann, Opalesque New York:

Activist fund Starboard Value has taken a new position in Dollar Tree. In a letter, the fund said that Dollar Tree could generate better value for shareholders if it raised prices and got rid of its Family Dollar brand of stores.

The Wall Street Journal first reported on Starboard's stake in Dollar Tree and plans Sunday.

Starboard Value argues that Dollar Tree is underperforming rivals like Dollar General and should adopt a multi-price point strategy. In its letter, Starboard points out that its advertised price of $1 for most items is actually higher factoring in sales tax, which gives the company room to start charging other amounts for items.

"Dollar Tree is focused on ensuring our brands are the premier shopping destination for value and convenience," the company said in a statement, adding that they would consider the issues raised by the activist.

Dollar Tree's stock is down 15 percent over the past year.

Starboard plans to announce a push for as many as seven new board members at the next Dollar Tree shareholder meeting.

Starboard Value is most well known for its investment in Darden Restaurants, which owns Olive Tree and several other fast casua......................

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