Two days after the Aaron’s board rejected its offer, private equity firm Vintage Capital Management on Thursday dropped its $2.3 billion bid to take over the Atlanta-based rent-to-own giant.
In a terse letter to Aaron’s directors, Vintage said it rescinded the proposal because of Aaron’s recent purchase of online lease-to-own lender, Progressive Finance, and Vintage’s unhappiness with takeover negotiations.
“Your decision to reject our offer and instead spend $700 million on the acquisition of Progressive Finance without any input from shareholders appears to be a desperation move designed to do nothing but block our offer,” Vintage managing member Brian Kahn wrote.
Aaron’s stock fell 1.44 percent Thursday.
Orlando-based Vintage, Aaron’s second-largest shareholder with a 10 percent stake, unveiled its takeover plans in early February after Aaron’s reported slumping fourth quarter 2013 earnings.
Since then Aaron’s has been under fire from franchisees about its sales performance and from investors, who questioned its board make up.
Kahn said recent changes made to Aaron’s board also deserved scrutiny. Those changes included removing Aaron’s Chief Financial Officer Gil Danielson from the board and taking the chairmanship away from Aaron’s Chief Executive Officer Ron Allen.
“Over the next few months, all of our energy will be spent on making sure that shareholders have a voice in the boardroom,” Kahn said in the letter.
In response, Aaron’s spokeswoman Garet Hayes referred to the company’s Tuesday letter to shareholders: “In addition, to ensure that Aaron’s is best positioned to grow, we have made a number of changes to our Board, management and corporate governance policies. These changes are designed to increase transparency, accountability and provide the right governance structure that will allow us to drive superior shareholder value.”
About the Author
