Chip Wilson, the founder of Lululemon Athletica Inc., has agreed to sell half his 27 per cent stake in the company in a deal that will prevent a proxy war over control of the yoga apparel company.
Wilson also agreed not to orchestrate a hostile takeover of the company for the next year and a half.
- Lululemon shareholders shut down Chip Wilson's shakeup
He has been battling to regain control of Lululemon since the board forced him to resign as chair last December. Wilson had fought to oust two members of the board of directors and threatened to lead a shareholder revolt at the AGM, bolstered by his large stake in the company.
Instead, Wilson will sell half of his stake to private equity firm Advent International for $845 million and Advent will get two seats on the Lululemon board, expanding it to 12 members. Advent is a significant minority shareholder of Lululemon.
Advent senior manager David Mussafer becomes co-chair of Lululemon and Steve Collins also joins the board.
Wilson has been critical of board chair Michael Casey, saying his approach is too focused on short-term growth.
Once a market darling, Lululemon shares have fallen 46 per cent in the past year. The company got into trouble over see-through yoga pants last March and had to do an expensive recall.
Then Wilson made the problem worse by saying that some women’s bodies were not made to fit into yoga pants.
The Lululemon board has agreed to a third-party review of its governance in return for Wilson and Advent agreeing not to wage a proxy war.