Jana Partners LLC reported a 13.5% holding in Outerwall Inc. The activist investor said it intends to explore options, including a possible sale. Jana Partners said it could sell Outerwall, the operator of the Redbox video rental kiosks, reported Reuters.

During the extended trading, Outerwall's shares went up to 9%.

In a regulatory filing, Jana Partners led by Barry Rosenstein said that it believed that its stocks in Outerwall were undervalued. Jana Partners' stake in the company made it the biggest shareholder in the company.

Last month, the hedge fund revealed information that it owns 6.2% of stake in grocery chain Safeway Inc. Earlier this year, Jana had lost a battle to break up fertilizer company Agrium Inc. This was after the company failed to get elected to the company's board of directors.

Michael Pachter, an analyst at Wedbush Securities said that the firm could find more support among the shareholders at Outerwall Inc.