Seller’s Chairman Steven Pepper Resigns Over Argument with Board’s Choice
Rent-A-Center Inc. (NASDAQ/NGS: RCII), one of the nation’s largest rent-to-own store operators, announced plans to think about options consisting of a sale of the chain which runs approximately 2,500 shops in the United States, Mexico, Canada and Puerto Rico.
The Plano, TX-based business also revealed that its chairman, Steven L. Pepper, resigned from his position efficient today. Pepper notified the company that his resignation was a result of his dispute with the board’s decision to initiate a tactical review process for the merchant.
Rent-A-Center will suspend its stock dividend payments till it finishes its review. The board’s choice follows calls from activist investors to put the business up for sale after reportedly decreasing buyout offers from a handful of personal equity companies this year, consisting of an $800 million deal from private equity firm Vintage Capital in June.
Engaged Capital, a Newport Beach financial investment company with a stake in the business, commended the board’s decision calling it long past due.
“Engaged Capital believes that Rent-A-Center stays an attractive acquisition opportunity. Our company believe the business’s strong capital generation, liquidity and leadership position in the appealing rent-to-own industry combine to underpin possible transaction rate ranges that would allow both stockholders and a possible acquirer to recognize significant worth,” the company stated.
Engaged Capital likewise claimed Rent-A-Center formerly cannot pursue trustworthy quotes at significant premiums to its stock cost earlier this year, including, “Engaged Capital reminds the board that our analysis shows that a tactical acquirer could understand $300 million or more of synergies and functional improvements.”
The firm has actually engaged J.P. Morgan as its monetary consultant and Winston & & Strawn LLP as legal consultant. Rent-A-Center reported a loss this week the 3 months ended Sept. 30 of $12.6 million vs a $6.2 million profit for the very same quarter last year.