Vintage Capital Management LLC, the second largest shareholder
of the rent-to-own retailer
), came up with the much awaited reaction on Friday after facing
rejection for the fourth time in acquiring Aaron's.
The owner of nearly 10% of Aaron's shares withdrew from its
previously offered $30.50 per share or $2.3 billion bid to
acquire Aaron's as it expressed its disappointment in the
latter's decision to buy Progressive Finance in addition to the
continued distressed performance. Further, Vintage Capital
remains unimpressed by Aaron's action of suing the former in
order to prevent one of its largest shareholders from voting at
the upcoming annual meeting.
Vintage Capital had made a bid to acquire all shares of Aaron's
in February this year quoting the aforementioned buyout offer
that was priced at nearly a 12.7% premium to the latest closing
price of Aaron's shares on that day. Further, the private equity
firm's offer incorporated an option to raise the buyout price
after negotiating with Aaron's management.
As a sequel, on Mar 7, Vintage Capital sent a notice to Aaron's
intimating it of the nomination of five candidates to the
latter's board at the Annual General Meeting (AGM) to be held in
May. This move was a part of Vintage Capital's intention to gain
a majority in Aaron's 9-member board.
Prior to the current offering, Vintage Capital had made three
private proposals for acquiring Aaron's, which were ignored by
the latter. Thereafter, the investment firm increased its
shareholding to approximately 10% in the company, consequently
becoming the largest stakeholder and decided to publicly disclose
Aaron's has been witnessing soft top and bottom-line performances
for the last several quarters. Moreover, the company believes
that the current business environment will not change
significantly in the near term.
Notably, the stock price of Aaron's lost 1.4% on Thursday and
closed at $29.41.
Other Stocks to Consider
Currently, Aaron's holds a Zacks Rank #2 (Buy). Some
better-ranked stocks worth considering in the retail industry
Barnes & Noble Inc.
Rite Aid Corp.
). All of these have a Zacks Rank #1 (Strong Buy).
AARONS INC (AAN): Free Stock Analysis Report
BARNES & NOBLE (BKS): Free Stock Analysis
RITE AID CORP (RAD): Free Stock Analysis
ZALE CORP NEW (ZLC): Free Stock Analysis
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