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Changes at Dillard's

It seems an activist fund is making some headway at Dillard's. It owns just more than 5 percent of Dillard's shares. Now it's getting some board seats. Could this mean a sale of the company is brewing? If so, who'd be the buyer?

New York-based Barington Capital Group LP and its affiliate, Clinton Group Inc., own 5.4 percent of Dillard's shares. The hedge funds have demanded a look at Dillard's books and nominated four people for seats on Dillard's board, including Barington chief James Mitarotonda.

On Tuesday after the bell, Dillard's issued a news release saying it will nominate one director favored by Barington and that the sides reached an agreement on the three other seats. The release said the agreement was reached in conjunction with Southeastern Asset Management.

Former Wal-Mart Stores Inc. executive Nick White was among Dillard's original nominees. The other nominees are James A. Haslam III, chief executive of Pilot Travel Centers LLC; R. Brad Martin, former chairman and chief executive of Saks Inc.; and Frank R. Mori, co-chief executive and President of Takihyo Inc.

The release said Barington and Clinton would vote for the company's nominees.

'We are pleased to have reached an agreement with Barington and Clinton. Both the board and management welcome the perspectives and insights of our proposed new directors,' said William Dillard II, the retailer's chairman, president and chief executive officer.

The four seats on the 12-member board were the only ones that Barington or other outside investors could influence. Members of the Dillard family control the majority of the company's Class B stock, which gives them two-thirds voting power for seats on the 12-member board.

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