Shareholders on Thursday June 8 voted to elect three dissident director candidates to the board of rent-to-own retailer Rent-A-Center (RCII) , giving the activist at the gate a major boost in his effort to drive a review and potential sale of the business.
Rent-A-Center shares were up slightly to $13.15 a share on the news.
The rent-to-own retailer's shareholders voted to elect three director candidates nominated by activist investor Glenn Welling and his fund Engaged Capital LLC in a battle that went the distance all the way to the company's annual meeting on Thursday. The directors will be a minority on Rent-A-Center's seven person board.
Nevertheless, expect that they will have a great deal of influence in the company's future, especially soon-to-be installed dissident nominee Christopher Hetrick, director of research at the activist fund. In addition to Hetrick, Engaged succeeded at installing Mitchell Fadel, a former Rent-A-Center president, and director, who worked at the company for 22 years that were mainly positive for shareholders.
Shareholders also backed Engaged's dissident nominee Jeffrey Brown, which one shareholder advisory firm suggested has "finance and transnational experience that could likely be of value to the board as it considers opportunities to maximize shareholder value."
The move by shareholders to elect Hetrick and Brown sends a loud message that investors want to see Rent-A-Center consider a sale. A board with Brown and Hetrick will focus on seeing if a sale made sense as an alternative to a turnaround plan underway at the company. That means strategic M&A could be on the horizon.