Activist investor Glenn Welling on Tuesday said he was "outraged" to learn that Rent-A-Center Inc. (RCII) had rejected takeover interest in recent months from two buyout shops, in addition to a $15 a share offer that it had snubbed from private equity firm Vintage Capital Management LLC.
"Neither of these prior approaches was disclosed to shareholders, even in the context of rejecting the offer from Vintage Capital," said Engaged Capital LLC's Welling in a statement.
Welling's comments come after Reuters reported Monday that Rent-A-Center had received acquisition interest from buyout shops HIG Capital and Lone Star Funds before it had rejected an $800 million bid from Vintage Capital. Rent-A-Center disclosed in a filing on July 11 that it had rejected a Vintage bid earlier this month but did not reveal any other expressions of interest. Officials from both HIG and Lone Star Funds did not return calls for comment.
The report comes after shareholders last month, on June 8, voted to elect a three-person dissident director slate nominated by Engaged Capital onto Rent-a-Center's seven-person board. Welling's fund, which has a 17% stake, had been pushing to have the rent-to-own company conduct a review and potentially sell the business.
The Deal had reported in April, citing people familiar with the situation, that Vintage Capital, which is the majority owner of a smaller rent-to-own competitor, Buddy's Home Furnishings, had been interested in buying Rent-a-Center. Also, The Deal reported that another rent-to-own operator, Aarons Inc. (AAN) was also interested.
Shortly after the election on June 19, Welling noted in a letter that Rent-a-Center's board chairman Steven Pepper said that he would take a two-month vacation and would be unavailable until August. Nevertheless, it is likely The Rent-A-Center board probably held a meeting of some sort on July 5, according to a July 11 securities filing, to decide to reject the Vintage offer. The filing said that Rent-A-Center on July 5 formally rejected Vintage's proposal with the assistance of its financial and legal advisers.