(Reuters) - Rent-A-Center Inc (RCII.O), which has been under pressure to sell itself, said on Monday it would nominate to its board an independent director recommended by its largest shareholder and activist investor, Engaged Capital.
Shares of the company fell 4.5 percent to $9.30, touching more than a 3-month low in afternoon trading.
The rent-to-own furniture retailer’s said Engaged Capital’s nominee would replace current Director Rishi Garg and that it may expand the size of the board to seven from six following its 2018 annual meeting.
Engaged Capital, which owns nearly 17 percent of Rent-A-Center, has argued that an overhaul of the retailer could be best achieved in the hands of private owners, pushing the company to sell itself.
Buyout firm Vintage Capital Management LLC said last month it was discussing a potential deal with the company and that it had agreed not to raise its stake or seek to gain control of Rent-A-Center’s board.
Vintage Capital in November offered to buy the company for about $693 million, a week after the furniture retailer decided to explore strategic options, which led to the resignation of Chairman Steven Pepper.
Rent-A-Center Chief Executive Mark Speese quit in January, a little more than two months after Pepper stepped down. He was replaced by former President Mitchell Fadel.
Reporting by Vibhuti Sharma in Bengaluru; Editing by Shounak Dasgupta and Anil D'Silva