UPDATE 1-Vintage Capital offers to buy Aaron's Inc in $2.3 bln deal

Fri Feb 7, 2014 11:45am EST

Feb 7 (Reuters) - Aaron's Inc shareholder Vintage Capital Management said it offered to acquire the electronics and furniture rental chain in a deal valued at about $2.3 billion, its fourth attempt to buy the company in three years.

The private equity firm offered $30.50 per share, a premium of 12.8 percent to Aaron's Thursday closing price.

The company's shares rose to $32.27 in early trading on Friday, indicating that some investors expect a higher bid.

Aaron's was not immediately available for comment on the deal. However, on a post earnings call with analysts, executives said "they will evaluate (the offer), or whatever."

Aaron's, which offers customers the option to rent a product and then eventually buy it, also reported fourth-quarter revenue that missed analysts' average estimate, hurt by weak consumer spending.

The company lowered its sales and earnings estimates last month due a drop in customer visits at its stores.

The company said it planned to slow down the expansion of its Aaron's and HomeSmart stores until business at existing stores improves.

Atlanta-based Aaron's has more than 2,115 company-operated and franchised stores in the United States and Canada.

In a letter to Aaron's board on Friday, Vintage Capital said it had privately offered to acquire the company three times since 2011, but was "summarily ignored."

"During this time, Aaron's stock has performed poorly while general stock market indices have appreciated significantly," the private equity firm wrote in the letter, which was made public in a regulatory filing. ()

Vintage Capital also holds a majority stake in Buddy's Home Furnishings, another rent-to-own business operating in the southeast.

Vintage is one of Aaron's top 3 stakeholders, along with institutional management firms Fidelity Management & Research Co and T.Rowe Price Associates Inc.

The latest move comes almost a year after the private equity firm sought to acquire Anaren Inc, a manufacturer of microwave components.

Aaron's shares, which have risen 3.2 percent in a year to Thursday's close, were up 12 percent at $30.25 in late morning trading on the New York Stock Exchange on Friday.

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