US electronics chain gets $2.3bn takeover bid
Atlanta, February 8, 2014
Atlanta-based Electronics and furniture rental chain Aaron has received a offer valued at $2.3 billion from its shareholder Vintage Capital Management to buy the company, the latter's fourth attempt in three years.
A private equity firm, Vintage, is one of Aaron's top 3 stakeholders, along with institutional management firms Fidelity Management & Research Co and T.Rowe Price Associates.
The private equity firm offered $30.50 per share, a premium of 12.8 per cent to Aaron's Thursday closing price.
The company's shares rose to $32.27 in early trading on Friday, indicating that some investors expect a higher bid.
Aaron's was not immediately available for comment on the deal. However, on a post earnings call with analysts, executives said "they will evaluate (the offer), or whatever."
Aaron's, which offers customers the option to rent a product and then eventually buy it, also reported fourth-quarter revenue that missed analysts' average estimate, hurt by weak consumer spending.
The company lowered its sales and earnings estimates last month due a drop in customer visits at its stores.
The company said it planned to slow down the expansion of its Aaron's and HomeSmart stores until business at existing stores improves.
Atlanta-based Aaron's has more than 2,115 company-operated and franchised stores in the United States and Canada.
In a letter to Aaron's board on Friday, Vintage Capital said it had privately offered to acquire the company three times since 2011, but was "summarily ignored."
"During this time, Aaron's stock has performed poorly while general stock market indices have appreciated significantly," the private equity firm wrote in the letter, which was made public in a regulatory filing.
Vintage Capital also holds a majority stake in Buddy's Home Furnishings, another rent-to-own business operating in the southeast.-Reuters