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Jana Partners Takes Stake in Outerwall, Operator Of Redbox Machines

Posted On: 10/10/2013

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TAGS: vending, automated retailing, Jana Partners LLC, Outerwall Inc., Redbox DVD vending machines, Coinstar

NEW YORK CITY -- Activist investor Jana Partners LLC disclosed that it has taken a 13.5% stake in Outerwall Inc., the owner of Redbox DVD vending machines.

The New York City hedge fund firm said in a filing that Outerwall's stock is undervalued and that it plans to discuss strategic options with Outerwall's board. These include the possible sale of assets, or of the entire company, and changes to management.

Outerwall, previously known as Coinstar, said it "welcomes the opinions of its shareholders and is always open to constructive input toward the goal of enhancing shareholder value," and that the board regularly reviews its options.

Redbox generated $1.9 billion of Outerwall's $2.2 billion in revenue in 2012. Revenue was up 22% in 2012 and 35% in 2011. Outerwall's financial performance fell short of Wall Street's expectations in the second quarter, hurt by declines in DVD rentals at Redbox kiosks. | READ MORE

The company has been diversifying its automated retail solutions, most recently with its acquisition of Outerwall. Its self-serve eCycling kiosks let consumers trade in their used mobile phones, tablets and MP3 players for cash. | READ MORE