Engaged Capital, LLC (together with its affiliates, “Engaged Capital”)
an investment firm specializing in enhancing the value of small and
mid-cap North American equities with a 20.5% economic exposure to
Rent-A-Center, Inc. (“Rent-A-Center” or the “Company”) (NASDAQ:RCII),
today issued a statement in respect of its investment in Rent-A-Center.
Engaged Capital commends the Company’s Board of Directors (the “Board”)
on initiating a long overdue strategic alternatives review process to
unlock value for all stockholders. Engaged Capital believes that
Rent-A-Center remains an attractive acquisition opportunity. We believe
the Company’s strong cash flow generation, liquidity and leadership
position in the attractive rent-to-own industry combine to underpin
potential transaction price ranges that would allow both stockholders
and a potential acquirer to realize significant value.
While Rent-A-Center previously failed to pursue credible bids at
meaningful premiums to the prevailing stock price earlier this year, we
wholly expect the Board and senior management team to earnestly pursue
strategic alternatives for the benefit of all stockholders following
today’s announcement. Engaged Capital is also pleased to see that the
apparent impediment in the boardroom towards running a strategic
alternatives process has been removed. Engaged Capital encourages the
Company to expeditiously begin the due diligence process with the
numerous publicly reported strategic and financial buyers that have
already provided indications of interest in acquiring Rent-A-Center,
beginning with the opening $15 per share bid from Buddy’s/Vintage
Engaged Capital reminds the Board that our analysis shows that a
strategic acquirer could realize $300 million or more of synergies and
operational improvements, as noted in our May 2, 2017 investor
presentation. This analysis should provide further confidence to the
Company in running a successful strategic review process.
We applaud the Rent-A-Center directors who have finally realized that
evaluating strategic alternatives is the best path forward to maximizing
value for all stockholders and expect that the Board will run an
objective, expedient and successful process.
About Engaged Capital:
Capital, LLC (“Engaged Capital”) was established in 2012 by a group
of professionals with significant experience in activist investing in
North America and was seeded by Grosvenor Capital Management, L.P., one
of the oldest and largest global alternative investment managers.
Engaged Capital is a limited liability company owned by its principals
and formed to create long-term shareholder value by bringing an owner’s
perspective to the managements and boards of undervalued public
companies. Engaged Capital’s efforts and resources are dedicated to a
single investment style, “Constructive Activism” with a focus on
delivering superior, long-term, risk-adjusted returns for investors.
Engaged Capital is based in Newport Beach, California.
View source version on businesswire.com: http://www.businesswire.com/news/home/20171030006378/en/