Redbox Owner Outerwall to Add Engaged Capital Slate to Board
April 12 2016 - 10:10AM
Dow Jones News
Outerwall Inc., the operator of Redbox movie rental kiosks,
agreed to nominate three new directors to its board as part of an
agreement reached with its second-largest shareholder, activist
investor Engaged Capital LLC.
The company said Jeffrey J. Brown had been appointed to its
board effective immediately, expanding it to eight directors. In
addition, Outerwall agreed to add two new independent directors
proposed by Engaged, who are expected to be named by August 1.
Outerwall said it's board will be capped at nine directors at that
time.
In exchange, Engaged agreed to vote all of its shares in favor
of Outerwall's board nominees at its annual shareholders
meeting.
Engaged owns 2.4 million shares in Outerwall, representing a
14.6% stake, according to FactSet.
The moves come about two months since Engaged sent a scathing
letter to Outerwall's board that criticized chairman Nelson Chan
and blasted the company's "penchant for chasing growth," citing
what it viewed as poor corporate governance.
Engaged had called on the board to focus more closely on its
Redbox movie rental machines and Coinstar coin-counting kiosks, and
manage both to drive cash flow. It also called for a large annual
dividend; the company in March doubled its quarterly dividend to 60
cents from 30 cents.
Erik E. Prusch, Outerwall's chief executive, said the company is
"aligned with shareholders and taking decisive actions on their
behalf."
Shares of Outerwall rose 24% in the past three months. The stock
was inactive premarket.
Write to Joshua Jamerson at joshua.jamerson@wsj.com
(END) Dow Jones Newswires
April 12, 2016 09:55 ET (13:55 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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