Lowe’s has appointed two new board members following talks with activist hedge fund D.E. Shaw, which recently built a stake in the home improvement chain.
The company’s shares were up 1.8 percent in premarket trading on Friday.
D.E. Shaw had built up about a $1 billion stake amid approaching the company about changing the board, sources tell CNBC. The firm, which was looking to close Lowe’s gap in revenue-per-store, margin, and valuation multiple versus Home Depot, had had a 50-page presentation that was shared with the Lowe’s board, those sources added.
David Batchelder, co-founder of Relational Investors, and Lisa Wardell, CEO of Adtalem Global Education, were named to the board after “constructive discussions” with D.E. Shaw, Lowe’s said.
The retailer also said it would nominate Brian Rogers, chairman of T. Rowe Price Group and its former chief investment officer, for board election at its annual shareholder meeting.
Batchelder was recommended by D.E. Shaw, while Wardell and Rogers were the company’s candidates, a source close to the matter said.
The appointments of Batchelder, who will serve on the board’s compensation committee, and Wardell, who will sit on the audit committee, are effective March 22.
Last week, CNBC reported that D.E. Shaw had built an activist stake in Lowe’s, concerned about the home improvement retailer’s performance, but was not planning to push for consolidation with another home retailer at this time.
—CNBC’s Leslie Picker contributed to this report.