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Post by The Ultimate Nullifier on Mar 14, 2016 19:22:56 GMT -6
variety.com/2016/biz/news/redbox-outerwall-exploring-sale-1201729596/ Redbox Parent Company Says It’s Exploring Sale Outerwall doubles quarterly dividend, coming after pressure from activist investor group Outerwall, which owns DVD-rental kiosk operator Redbox, announced that it is exploring “strategic and financial alternatives to maximize shareholder value” — indicating the company is looking to sell itself. In addition, the company announced that it was doubling the quarterly dividend to shareholders, from the previous 30 cents per share to 60 cents per share. Shares of Outerwall jumped as much as 14% in after-hours trading Monday. Outerwall’s announcements come after activist investor group Engaged Capital publicly urged the board to take the company private and make other changes, including boosting its annual dividend. The moves come amid ongoing sales declines at Redbox, which is Outerwall’s largest unit. Earlier this year, Outerwall issued a weaker-than-expected outlook for Redbox, forecasting DVD rentals to decline 15% to 20% in 2016. “The increase of our quarterly dividend to this sustainable level and the decision to explore strategic and financial alternatives both clearly demonstrate that the Outerwall board of directors and management team are committed to acting in the best interests of the company and all shareholders,” Outerwall CEO Erik Prusch said in a statement. Outerwall said it has retained Morgan Stanley as financial adviser and Perkins Coie LLP as its legal adviser to assist in the process. “The board and management team will evaluate all options thoughtfully and carefully with the support of our advisers,” Prusch said.
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