(Repeats to widen distribution, no change th headline or text)
By Nadia Damouni
NEW YORK Aug 7 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)