(Recasts lead with sale of part of founder's stake; adds
By Nadia Damouni
NEW YORK Aug 7 Lululemon Athletica Inc
founder Chip Wilson will sell half of his 27 percent stake in
the yoga apparel maker to private equity firm Advent
International for $845 million, as part of a deal in which
Wilson agreed not to wage a proxy contest.
Under the agreement announced by the company on Thursday,
Advent will also add two of its senior managers, David Mussafer
and Steve Collins, to Lululemon's board, expanding it to 12
members. Mussafer will take become co-chairman, alongside
Chairman Michael Casey.
Both Mussafer and Collins have previously served on
Shares of Lululemon, which have fallen nearly 46 percent in
the last 12 months, jumped 7 percent to $41.80 in after-hours
trade on Thursday.
Wilson's sale of approximately 20.1 million Lululemon shares
at $845 million implies a value of $42.04 a share.
Wilson, Lululemon's largest shareholder, 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 merger and acquisition transaction for the
next year and a half.
In June, Wilson publicly lashed out at the retailer's
board, saying the new chairman and another director were too
focused on short-term growth. Wilson, who had agreed to step
down as non-executive chairman in December, 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. Christine Day stepped down as chief executive
following the embarrassing recall.
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.
Goldman Sachs advised Wilson. The sale of stock to Advent
will require regulatory approval and is expected to close in the
next two months.
(Reporting by Nadia Damouni; additional reporting by Olivia
Oran; Editing by Jilian Mincer, David Gregorio and Leslie Adler)