Shares in Redbox owner Outerwall spiked more than 10% in postmarket trading after the company announced that it has hired advisers to “explore strategic and financial alternatives to maximize shareholder value” — jargon terms that often mean it’s for sale.
The company hired Morgan Stanley to help with financial matters and Perkins Coie to deal with legal ones.
The board sweetened the news for shareholders by doubling its dividend to 60 cents per share. It will be paid on June 21 shareholders of record as of June 7.
The decisions “clearly demonstrate” that leaders of the firm that’s famous for its DVD kiosks are “committed to acting in the best interests of the Company and all shareholders,” CEO Erik Prusch said. “Throughout the review process, Outerwall will remain focused on executing on our operational plans, managing our businesses for profitability and cash flow, and continuing to align costs with revenue to create operational efficiencies, while returning significant capital to our investors.”
Outerwall shares have lost more than 48% of their value during the past 12 months as Redbox suffered from the public’s shift from DVDs to streamed entertainment.