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By Nadia Damouni
NEW YORK, Aug 7 (Reuters) - Chip Wilson, the founder of Lululemon Athletica Inc, has agreed not to wage a proxy contest on the yoga apparel maker, in return for two additional director positions and number of other governance changes, the company said on Thursday.
As part of the agreement, Wilson will sell half of his 27 percent stake to private equity firm Advent International for $845 million. Advent will add two of its senior managers, David Mussafer and Steve Collins - to Lululemon's board, expanding it to 12 members. Mussafer will take the role as co-chairman alongside existing chairman Michael Casey.
Wilson and Advent have signed a standstill agreement that would prevent them from waging a proxy contest until after the annual shareholder meeting in 2016. It also prevents them from conducting or supporting a hostile M&A transaction for the next year and a half.
In June, Wilson, Lululemon's largest shareholder, publicly lashed out at the retailer's board saying the new chairman and another director were too focused on short-term growth. Wilson then voted against them at the board elections.
Vancouver-based Lululemon, once a market darling, has struggled after announcing an recall of see-through yoga pants in March 2013. Then-CEO Christine Day stepped down from the company following the embarrassing recall and shares of the company have fallen nearly 46 percent in the last 12 months.
In addition, the board has agreed to allow a third party governance expert to conduct a review that includes evaluating number of directors, process of nominee selection and election, member composition, and committees. (Reporting By Nadia Damouni; additional reporting by Olivia Oran; Editing by Jilian Mincer and David Gregorio)