After being turned down three times, it seems that the private
equity firm, Vintage Capital Management LLC is now leaving no
stone unturned to successfully acquire the rent-to-own retailer,
). Notably, 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
The aforementioned move will enable Vintage Capital to have a
majority in Aaron's nine-member board. Further, the private
equity firm has revealed that it could consider raising the
buyout price after negotiating with Aaron's management.
Additionally, the founder of Vintage Capital, Brian Kahn, has
criticized the ill-advised strategies of current Chairman and
Chief Executive of Aaron's, Ronal W. Allen for the downfall of
Aaron's. We believe that a change in leadership will reinstate
the former glory of Aaron's.
Later, on the same day, Aaron's confirmed having received
Vintage Capital's notice. Apart from this, Aaron's declared that
it had received another notice from Starboard Value LP for
nominating four candidates in its board.
Aaron's also provided an update stating that the Transaction
Committee formed to evaluate Vintage Capital's acquisition offer
has still not reached a conclusion. Moreover, the committee is
looking for other opportunities to enhance the long-term value of
Last month, Vintage Capital made an offer of $30.50 per share
or $2.3 billion to acquire the leading rent-to-own retailer. In
response, Aaron's had formed a Transaction Committee on Feb 21 to
evaluate Vintage Capital's offer.
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. Looking at the present business
scenario, Aaron's now intends to slow down the pace of opening
namesake and HomeSmart stores.
Notably, the stock price gained 1.9% on Friday and closed at
Other Stocks to Consider
Currently, Aaron's holds a Zacks Rank #5 (Strong Sell).
However, some better-ranked stocks worth considering in the
retail industry include
Barnes & Noble, Inc.
Christopher & Banks Corp.
Iconix Brand Group, Inc.
). All of these have a Zacks Rank #1 (Strong Buy).
AARONS INC (AAN): Free Stock Analysis Report
BARNES & NOBLE (BKS): Free Stock Analysis
CHRISTOPHER&BNK (CBK): Free Stock Analysis
ICONIX BRAND GP (ICON): Free Stock Analysis
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