An unsolicited effort to acquire rent-to-own giant Aaron’s officially died Tuesday after the Atlanta retail giant appointed the leader of the takeover attempt to its board.
Brian Kahn, managing member of Vintage Capital Management, Aaron’s second-largest shareholder, said his company will no longer seek to acquire Aaron’s now that he has struck a deal to be on Aaron’s board.
“We will still be able to have an impact on the company’s direction,” he said. “But it will have to be as a 10 percent shareholder instead of a 100 percent shareholder.”
Vintage had dropped its bid to buy Aaron’s last month after Aaron’s bought online lender Progressive Finance for $700 million. But Kahn suggested he would regroup and make another offer.
Tuesday’s announcement of his appointment to the board effectively killed any acquisition plans, he said.
The move comes after months of negotiations with Aaron’s in which the company tried to reach a compromise with Vintage.
Kahn will take his seat May 20 as Aaron’s expands its board from eight to 10 members. Kahn also will be a part of Aaron’s slate of board nominees for the company’s upcoming annual meeting in June. He had been running on a competing slate.
The change comes as Aaron’s is struggling to get back on its fiscal feet. The company reported last month that net earnings fell to $38.3 million, or 53 cents a share, in the quarter ended March 31. That is down from $51 million, or 67 cents a share, in the same period a year earlier.
Revenue dipped to $585.4 million, from $593 million.
Kahn and the board have had a contentious relationship in the past few months, including an earlier disagreement over a proposal Kahn said would have placed him on the board in exchange for putting off acquisition plans for at least two years.
Aaron’s said Vintage will vote its shares in support of all of nominees Aaron’s board puts forth at the annual meeting as part of a new agreement with the retailer.
The company also has formed an operational and financial advisory committee on core business matters. Kahn, Aaron’s Chief Executive Officer Ron Allen and board chairman Ray Robinson will be the committees’ founding members.
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