Newport Beach-based Engaged Capital LLC renewed its battle against Rent-A-Center Inc. (NASDAQ: RCII).
“We are outraged to learn” that the board of directors of Rent-A-Center rejected expressions of takeover interest from two private equity firms that were not disclosed to shareholders, Engaged Capital said in a statement.
Rent-A-Center “snubbed” takeover interest from private equity firms HIG Capital and Lone Star Funds before a $15 a share offer from Vintage Capital was rejected earlier this month, Reuters reported yesterday, citing unidentified people familiar with the matter.
Engaged Capital won a proxy battle in June to place three nominees onto the seven-member board of directors. The activist investment firm begun in 2012 by Glenn Welling began buying shares late last year of Plano, Texas-based Rent-A-Center and is now its largest shareholder with a 20.5% stake that includes swaps.
“We are concerned that the four remaining incumbent directors are willfully ignoring the voices of the majority of shareholders to continue the blind pursuit of the company’s risky turnaround plan,” Engaged Capital said.
A statement from the Rent-A-Center board said it intends to quickly implement its turnaround plan.
"Today, the Rent-A-Center board and management team are expeditiously executing the company’s strategic plan to restore growth and improve profitability," said the statement. "The board remains open-minded and regularly reviews the company’s strategic priorities and opportunities."
Shares of Rent-A-Center rose today 1.5% to $12.56. Shares are up about 62% from their 52-week low in February when Engaged Capital announced its battle.