Independent advisory firm backs activist bid for Blockbuster board seat

Advisory firm backs investor bid for Blockbuster

NEW YORK — A prominent proxy advisory firm recommended that Blockbuster shareholders elect an activist investor attempting get on the movie rental company’s board.

Support from RiskMetrics Group on Tuesday is a setback for Blockbuster’s management, which has been urging shareholders to reject the bid by Gregory S. Meyer. Shareholders will make their decision at the company’s annual board meeting June 24.

In a statement, RiskMetrics said Meyer “would be aligned with shareholders, has demonstrated that change is warranted, has relevant skill sets and industry knowledge, and, therefore, is likely to add value to board deliberations.”

Shares of Blockbuster Inc. rose 16 percent, or 3.5 cents, to 25 cents each.

Meyer founded a DVD rental kiosk business in 2001 called DVDXpress and later sold it to Redbox operator Coinstar Inc. The business has emerged as a major competitor for Blockbuster’s traditional stores.

Meyer has argued that Blockbuster doesn’t have a practical strategy for competing with Redbox or Netflix Inc., which have eaten away at its business. He is trying to replace director Gary J. Fernandes, the chairman of a real estate investment company called FLF Investments.

Blockbuster argues that Meyer’s business experience does not make him a good fit for the board. It has pointed to another independent opinion from the proxy firm Glass, Lewis & Co., which recommended shareholders for Blockbuster’s existing directors.

The company did not immediately respond to a request for comment on the RiskMetrics report.