(Reuters) - Hain Celestial Group Inc, under pressure from activist shareholder Engaged Capital LLC to make drastic changes at the U.S. organic food company, said on Thursday it would name six new directors to its board, including the hedge fund’s founder.
Shares of Hain, which makes Health Valley bars, Walnut Acres tomato sauces and Tilda basmati rice, were up about 1 percent at $40.83 in morning trade.
The Wall Street Journal, which first reported the board changes, said Hain would form a group of directors to explore options including selling itself. (on.wsj.com/2fSO4Pc)
The board changes are a win for Engaged Capital, which disclosed a 9.9 percent stake in Hain in June, saying it could urge Hain to consider selling itself.
Hain’s board will now comprise 11 directors including Engaged Capital founder Glenn Welling, with all but one independent. Three current board members will not stand for re-election, the company said.
Hain also said it had entered into an agreement with Engaged Capital to create a working group and executive compensation committee that will give Welling a seat at the table.
Engaged also agreed to a standstill period during which it will not purchase more stock in Hain, the company said.
Engaged Capital has previously targeted Rent-A-Center Inc, in which it is the top shareholder, nominating three directors to the furniture retailer’s board.
Reporting by Tamara Mathias and Kanishka Singh in Bengaluru; Editing by Gopakumar Warrier, Savio D'Souza and Sai Sachin Ravikumar