(Corrects paragraph 7 to say Aaron's revenue, not earnings,
outlook was cut to $587.5 million)
April 15 Aaron's Inc, a rent-to-own
furniture and electronics retailer, rejected a $2.3 billion
takeover offer from a major shareholder and instead acquired a
retail credit financing firm for about $700 million.
In a letter to shareholders, the retailer called the offer
from Vintage Capital Management, which owns 10 percent in the
company, "inadequate and illusory".
The offer, made in February, was the private equity firm's
fourth attempt to buy the consumer electronics and furniture
rental chain since 2011.
Aaron's said its cash deal to buy Progressive Finance
Holdings LLC, which provides web-based lease-to-own financing
programs for retailers, will allow it to provide its customers
with better payment options and expand further into the virtual
Aaron's offers customers the option to rent a product on
layaway now and buy it later.
The acquisition of Progressive Finance, which services more
than 5,500 retailers in the United States, will add to Aaron's
cash earnings from 2014, the company said in a statement on
Separately, Aaron's cut its first-quarter revenue outlook to
$587.5 million from nearly $600 million. The company said it
expected the effect of a severe winter weather to negatively
impact earnings in the range of 5 cents to 6 cents per share.
Aaron's shares were down 1.8 percent in light premarket
trading. They had closed at $30.47 on the New York Stock
Exchange on Monday.
(Reporting by Shailaja Sharma in Bangalore; Editing by Joyjeet
Das and Prateek Chatterjee)