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April 12 (Reuters) - Redbox video rental kiosks owner Outerwall Inc said it had agreed with activist hedge fund Engaged Capital LLC to add three independent directors to its board.
Outerwall said on Tuesday that it would appoint Jeffrey Brown, the chief executive of Brown Equity Partners LLC, to its board with immediate effect and two other directors would be named by Aug. 1.
Brown’s appointment expands Outerwall’s board to eight directors, seven of whom are independent. The board will have a maximum of nine members after the addition of the other two directors, the company said.
Engaged Capital, which holds about 14.6 percent stake in Outerwall, had urged the company in February to consider strategic alternatives, including going private.
The hedge fund had said then that the company’s board had “squandered” about $1.2 billion of shareholder capital over the past four years.
Outerwall, bowing to pressure from Engaged Capital, said in March it would explore strategic and financial options.
Last year, the hedge fund had also pressured weight loss products maker Medifast Inc into adding Brown to its board.
Outerwall, earlier known as Coinstar, generates most of its revenue from the Redbox business it acquired in 2008.
The company’s shares closed at $39.04 on Monday. Up to Monday’s close, the stock had fallen about 40 percent in the past 12 months. (Reporting by Anya George Tharakan in Bengaluru; Editing by Kirti Pandey)