Activist investor Carl Icahn filed documents with the Security and Exchange Commission (SEC) late Friday announcing that he had acquired a 9.4% stake in Family Dollar Stores Inc. (NYSE: FDO) through Icahn Enterprises L.P. (NASDAQ: IEP) and several of its subsidiaries. The stake is worth about $647 million at Family Dollar’s closing price on Friday of $60.53. Family Dollar shares rose about 10% in after-hours trading to $66.68.

In the SEC filing Icahn said that he acquired the 10.7 million shares of Family Dollar stock because he believes the stock is undervalued. Icahn said he sees “great long-term potential” in the discount retail industry and that Family Dollar would benefit from his efforts to “generate tremendous returns for all shareholders.” Icahn cites his recent actions at CVR Energy Inc. (NYSE: CVI), Chesapeake Energy Corp. (NYSE: CHK), Forest Laboratories Inc. (NYSE: FRX) and Biogen Idec Inc. (NASDAQ: BIIB) as examples of his good work on behalf of shareholders and company management.

Icahn also said that he intends to try to engage in conversations with Family Dollar’s senior management and board of directors to discuss the company’s “business and strategies to enhance shareholder value.” He also notes that such enhancement could include “the pursuit of operating initiatives or the exploration of strategic alternatives.” Icahn also said he may seek representation on Family Dollar’s board of directors.

Although Family Dollar stock has doubled in value over the past five years, shares have dropped about 10% over the past two years. Same-store sales dropped nearly 4% in the company’s most recent quarter, and if it weren’t for tobacco and consumables, sales the drop would have been much worse.

In his comments when the company reported fiscal second-quarter results, Family Dollar’s CEO said, “Notwithstanding the macro-economic pressure, competitive environment and severe weather, we are not satisfied with our results, and we hold ourselves accountable for improving our performance.” Don’t worry, folks, Carl Icahn is riding to the rescue.

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