(MATTHEWS) -- Family Dollar Stores, Inc. announced that its Board of Directors determined that the unsolicited, conditional proposal from Trian Group to acquire Family Dollar substantially undervalues the Company and that pursuit of a sale of the Company is not in the best interest of shareholders. The Board also adopted a shareholder rights plan that would significantly dilute shares if a takeover attempt proceeds.

The rights plan, which has a term of 12 months and a 10% beneficial ownership threshold, is intended to enable all of the Company's shareholders to realize the long-term value of their investment in the Company, according to a statement released on Thursday. The plan would reduce the likelihood that any person or group would gain control of the Company by open market accumulation or otherwise without paying a control premium for all shares.