Aaron’s Inc., the home furnishings and electronics rent-to-own retail chain, said it continues to “carefully” evaluate a buyout offer of more than $2 billion from a large investor.
Vintage Capital Management, which holds a 10 percent stake in Aaron’s, or 7.2 million shares, launched its fourth attempt in three years to acquire the company earlier this month.
In a statement, Aaron’s said a committee of its board of directors will “carefully review and evaluate” the proposal revealed by investor Brian Kahn, a Vintage managing member. But it also said Kahn has “over the years made unfunded and unspecific non-binding proposals” to acquire the company.
Aaron’s also said that it is confident the company’s current business plan will enhance long-term shareholder value.
The company said it recently completed a $125 million stock buyback of its common stock and increased its dividend. Stock repurchases can influence the value of shares. The company also said it is opening more retail locations and strengthening management.
When the deal was announced, Aaron’s shares traded as high as $32.27 in Nasdaq trading. The stock closed Monday at $30.60, up 31 cents.
Kahn said his deal was in the best interest of Aaron’s stockholders, employees and franchisees.
Orlando-based Vintage said it has had an 18-year relationship with the Atlanta company. The investment firm said it has significant experience in the rent-to-own industry, including several years as Aaron’s second-largest franchisee. Vintage is also a majority owner of Buddy’s Home Furnishings, a rent-to-own business operating primarily in the Southeast.
Aaron’s reported a 38 percent drop in fourth-quarter earnings, although the company beat Wall Street expectations. In announcing the quarterly results, Chairman and Chief Executive Officer Ronald Allen warned that “due to the nature of the sales and lease ownership business it will take several quarters of increasing our customer base to significantly grow revenues and earnings.”
A longtime Aaron’s board member, Allen stepped in as interim CEO in late 2011 to replace Robin Loudermilk, who stepped down citing health concerns. Allen took over as Aaron’s chairman and CEO in early 2012.
The company had 2,151 company-operated and franchised Aaron’s and HomeSmart locations at the end of December. That store count also included the RIMCO auto-rental brand, which the company has since sold.
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