Stocks in publisher Electronic Arts closed the day up 2% to $24.41 per share, following an announcement that could see Relational Investors principal Ralph Whitworth appointed to the company's board of directors.
EA announced Monday an agreement that gives Relational Investors the option to appoint Whitworth to EA's board starting September 15, 2011, provided that Relational Investors -- a $6.4 billion private investment fund that began investing in EA early this year -- continues to hold at least 6 million shares of common EA stock.
"Electronic Arts and Relational have engaged in a series of discussions about EA’s significant progress in improving its business and its prospects for continued growth and improvement," said EA CEO John Riccitiello.
"This agreement signals Relational’s confidence as we transform EA from a packaged goods company to a fully integrated digital entertainment company."
Relational owned approximately 1.5 percent of EA's common stocks as of the end of its fiscal quarter ending March 31st. Assuming it holds at least 6 million shares as agreed upon, that figure is now closer to 1.8 percent.
"EA’s performance over the last several months and the rapid growth of its digital business demonstrate the fundamental strength of its business franchise and management’s ability to extend the company’s industry leadership,” said Whitworth. "We are pleased to be closely engaged with EA’s management team and we are confident in the company’s growth potential."
Shares were traded for as high as $24.50 Monday afternoon immediately following the announcement, the highest they have been in the last year.