Rent-A-Center rejects terms of takeover bid from Vintage
November 14, 2017,
PLANO, Texas — Rent-A-Center has rejected the terms behind a $13-per-share takeover offer from private equity firm Vintage Capital Management, saying it’s too early in the review process to tie itself to an exclusive agreement.
In a letter to Vintage Capital Managing Member Brian Kahn, the rent-to-own giant said its board “remains committed to exploring a broad range of strategic and financial alternatives and ensuring a fair and impartial process to all parties that have expressed an interest in the company to date, or that may do so in the future.”
Earlier this month, Kahn sent a letter to Rent-A-Center Chairman Mark Speese with the roughly $693 million, $13-per-share offer, which was lower than a $15-per-share offer reportedly made by the investment firm this summer.
But for the bid — a premium to the Plano, Texas-based company’s current stock price — Vintage was asking for a 30-day exclusivity period to conduct its due diligence. Vintage said it owns about 6% of Rent-ACenter’s stock and has a 20-year history in the RTO industry. Its website lists Buddy’s Home Furnishings in its portfolio of company holdings as well as Aaron’s in its past portfolio.
The all-cash acquisition offer followed Rent-A-Center’s report of a $12.6 million third quarter loss, a 7.2% dip in revenue and the announcement that it is exploring “strategic and financial alternatives.” The struggling company has been under pressure from some large shareholders this year to sell itself.
Immediately following the latest offer, Rent-A-Center said its board and advisors “will carefully review and consider a full range of options, including the Vintage proposal.”
It has repeatedly said it doesn’t plan to disclose developments with the process until its board approves a course of action or “the process is otherwise concluded.”
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