Redbox Owner Outerwall Boosts Dividend, Seeks Alternatives
March 14 2016 - 05:30PM
Dow Jones News
Outerwall Inc., the parent of DVD kiosk operator Redbox, said it
will explore "strategic and financial alternatives" and doubled its
quarterly dividend to 60 cents a share from 30 cents.
Shares of Outerwall, which also runs the Coinstar and ecoATM
brands, rose 14% in after-hours trading to $39.15.
Last month, activist investment firm Engaged Capital LLC
disclosed a stake in Outerwall and urged the company to cease
virtually all investment and share repurchases, issue a $125
million dividend to investors and begin a sale process. Engaged
Capital criticized the company for "persistent failures."
In response, Outerwall said it was "unfortunate" that Engaged
initially shared its views publicly without first discussing them
with Outerwall. The company said it would carefully review the
firm's recommendations.
On Feb. 4, Redbox reported a 24% plunge in fourth-quarter movie
rentals, signaling that even budget-conscious consumers are
abandoning Hollywood's once-lucrative DVD business.
The company attributed the drop to "an accelerated decline in
the physical market," as well as fewer titles available to rent and
lower demand after a price increase.
In December, former Warner Bros. executive Mark Horak left his
post as Redbox president after less than two years on the job,
during which he unsuccessfully tried to transition the company to a
digital strategy. Outerwall Chief Executive Erik Prusch was named
interim president of Redbox.
Write to Josh Beckerman at josh.beckerman@wsj.com
(END) Dow Jones Newswires
March 14, 2016 17:15 ET (21:15 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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