(Reuters) - Activist investor Carl Icahn cut his stake in Family Dollar Stores Inc FDO.N, a day after the company agreed to be bought by rival discount chain Dollar Tree Inc (DLTR.O) for $8.5 billion.
Icahn said he was "determined" to dispose part of his stake rather than wait for the deal to close or for higher offers to emerge.
Icahn, who had threatened a proxy war against the struggling discount chain if it did not put itself up for sale, said on Monday there were "a handful of potential buyers" who could be a better fit to buy Family Dollar.
He had earlier touted fellow discounter Dollar General Corp (DG.N) as a potential buyer.
Icahn reported a 6.03 percent stake in Family Dollar on Tuesday, down from about 9.39 percent that made him the largest shareholder. (1.usa.gov/1lT2Qz6)
This makes Family Dollar Chief Executive Howard Levine the biggest shareholder, with an 8.17 percent stake as of July 27.
The company was not immediately available for comment. Its shares were trading largely unchanged at $74.36 in extended trading.
Reporting by Sruthi Ramakrishnan in Bangalore; Editing by Sriraj Kalluvila and Don Sebastian