Aaron’s second-largest shareholder said Friday it plans to nominate five people to the Atlanta company’s board of directors, including Ken Butler, its former chief operating officer.
Vintage Capital Management, which announced an unsolicited $2.3 billion takeover bid for the rent-to-own giant in February, said the move comes amid concerns over declining foot traffic at the chain and recent revenue and profit drops.
Brian Kahn, managing member of Vintage, said the reversal of fortune is especially significant because the company had had 27 years of continuous growth under “former management that included Mr. Butler.”
Aaron’s fourth-quarter sales — released in February — fell 2 percent to $553.9 million and net income declined to $22.7 million, from $36.6 million a year earlier.
Former Delta Air Lines CEO Ron Allen took over as Aaron’s chief executive officer in February 2012. Charlie Loudermilk Sr., who founded the company in 1955, retired as chairman in September 2012.
In addition to Butler, Vintage plans to nominate retired Starwood president Matthew Avril, Aaron’s franchisees Spencer Smith and Thomas Bernau, and Kahn. Aaron’s annual shareholder’s meeting is in May.
Aaron’s set up a transaction committee to study Vintage’s offer in February and on Friday said the committee “has been undertaking a broad review of opportunities to enhance long-term value for all of Aaron’s shareholders.”
“This further step in the evaluation of opportunities underscores the commitment of the Aaron’s board and management team to fully evaluate the Vintage proposal as well as all opportunities to create and enhance long-term value for all Aaron’s shareholders,” Allen said in a statement.
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