Rent-A-Center, Inc. (NASDAQ/NGS:RCII) (“Rent-A-Center” or the
“Company”), the nation's largest rent-to-own operator, today
announced that its Board of Directors has unanimously adopted a
stockholder rights plan (“the Rights Plan”) to protect the best
interests of all Rent-A-Center stockholders.
The Rights Plan is intended to enable all Rent-A-Center
stockholders to realize the value of their investment in the
Company and ensure all stockholders receive fair and equal
treatment. The Rights Plan is also designed to protect
Rent-A-Center stockholders by reducing the likelihood that any
person or group would gain control of the Company through open
market accumulation without appropriately compensating its
stockholders for such control or providing the Board sufficient
time to make informed judgments.
On March 25, 2017, the Rent-A-Center Board of Directors declared
a dividend distribution of one preferred stock purchase right (a
“Right”) for each outstanding share of common stock, $0.01 par
value, of the Company (the “Common Stock”). The distribution is
payable on April 14, 2017 to the stockholders of record on April 7,
2017 (the “Record Date”). Each Right initially entitles the
registered holder to purchase from the Company one one-thousandth
of a share of the Company’s newly-created Series D Preferred Stock
(the “Preferred Stock”) at a price of $25.00 per one one-thousandth
of a share of Preferred Stock (the “Purchase Price”) in the event
the Rights become exercisable subject to adjustment and the term of
the Company’s Rights Plan agreement.
In general, the Rights will become exercisable if a person or
group becomes the beneficial owner of 15% or more of the
outstanding Common Stock of the Company or announces a tender offer
for 15% or more of the outstanding Common Stock of the Company. In
the event that the Rights become exercisable due to the triggering
ownership threshold being crossed, each Right will entitle its
holder to purchase, at the Right’s exercise price, a number of
shares of Common Stock or equivalent securities having a market
value at that time of twice the Right’s exercise price. Rights held
by the triggering person will become void and will not be
exercisable to purchase shares at the reduced purchase price. The
Board of Directors will, in general, be entitled to redeem the
Rights at $0.001 per Right at any time before the triggering
ownership threshold is crossed.
Persons or groups that beneficially own 15% or more of the
outstanding Common Stock of the Company prior to the Company’s
announcement of the Rights Plan will not cause the Rights to be
exercisable until such time as those persons or groups become the
beneficial owner of any additional shares of the Common Stock of
the Company (other than by reason of a stock dividend, stock split
or other corporate action effected by the Company in which all
holders of Common Stock are treated equally).
The Rights Plan has an expiration date of March 28, 2020, or
earlier if stockholder approval of the Rights Plan has not been
obtained at or prior to Rent-A-Center’s 2018 Annual Meeting of
Stockholders (or any adjournment thereof). Stockholders of the
Company will be afforded the opportunity to vote to approve the
Rights Plan at the Company’s 2018 Annual Meeting (or any
adjournment thereof).
Additional details regarding the Rights Plan will be contained
in a Form 8-K to be filed by the Company with the U.S. Securities
and Exchange Commission (the “SEC”) on or about March 28, 2017.
J.P. Morgan is serving as financial advisor and Winston &
Strawn LLP is serving as legal advisor to Rent-A-Center.
About Rent-A-Center, Inc.
A rent-to-own industry leader, Plano, Texas-based,
Rent-A-Center, Inc., is focused on improving the quality of life
for its customers by providing them the opportunity to obtain
ownership of high-quality, durable products such as consumer
electronics, appliances, computers, furniture and accessories,
under flexible rental purchase agreements with no long-term
obligation. The Company owns and operates approximately 2,600
stores in the United States, Mexico, Canada and Puerto Rico, and
approximately 1,870 Acceptance Now kiosk locations in the United
States and Puerto Rico. Rent-A-Center Franchising International,
Inc., a wholly owned subsidiary of the Company, is a national
franchiser of approximately 230 rent-to-own stores operating under
the trade names of "Rent-A-Center," "ColorTyme," and "RimTyme."
Additional Information and Where to Find It
The Company intends to file a proxy statement with the SEC with
respect to its 2017 Annual Meeting. The Company’s
stockholders are strongly encouraged to read any such proxy
statement, the accompanying white proxy card and other documents
filed with the SEC carefully in their entirety when they become
available because they will contain important information.
Stockholders will be able to obtain any proxy statement, any
amendments or supplements to the proxy statement and other
documents filed by the Company with the SEC free of charge at the
SEC’s website at www.sec.gov. Copies
also will be available free of charge at the Company’s website at
www.rentacenter.com or by contacting the Company’s Investor
Relations at 972-801-1100. The Company, its directors, executive
officers and other employees may be deemed to be participants in
the solicitation of proxies from the Company’s stockholders in
connection with the matters to be considered at Rent-A-Center’s
2017 Annual Meeting. Information about certain of the Company’s
current directors and executive officers is available in the
Company’s proxy statement, dated April 18, 2016, for its 2016
Annual Meeting. To the extent holdings of the Company’s securities
by such directors or executive officers have changed since the
amounts printed in the 2016 proxy statements, such changes have
been or will be reflected on Statements of Change in Ownership on
Form 4 filed with the SEC. More detailed information regarding the
identity of potential participants, and their direct or indirect
interests, by security holdings or otherwise, will be set forth in
the proxy statement and other materials to be filed with the SEC in
connection with Rent-A-Center’s 2017 Annual Meeting.
Forward-Looking Statements
This press release and the guidance above contain
forward-looking statements that involve risks and uncertainties.
Such forward-looking statements generally can be identified by the
use of forward-looking terminology such as "may," "will," "expect,"
"intend," "could," "estimate," "should," "anticipate," or
"believe," or the negative thereof or variations thereon or similar
terminology. The Company believes that the expectations reflected
in such forward-looking statements are accurate. However, there can
be no assurance that such expectations will occur. The Company's
actual future performance could differ materially from such
statements. Factors that could cause or contribute to such
differences include, but are not limited to: the general strength
of the economy and other economic conditions affecting consumer
preferences and spending; factors affecting the disposable income
available to the Company's current and potential customers; changes
in the unemployment rate; difficulties encountered in improving the
financial and operational performance of the Company's business
segments; our chief executive officer and chief financial officer
transitions, including our ability to effectively operate and
execute our strategies during the interim period and difficulties
or delays in identifying and attracting a permanent chief executive
officer and chief financial officer, each with the required level
of experience and expertise; failure to manage the Company's store
labor and other store expenses; the Company’s ability to identify,
develop and successfully execute strategic initiatives; disruptions
caused by the implementation and operation of the Company's new
store information management system, including capacity-related
outages; the Company’s ability to successfully market smartphones
and related services to its customers; the Company's ability to
develop and successfully implement virtual or e-commerce
capabilities; disruptions in the Company's supply chain;
limitations of, or disruptions in, the Company's distribution
network; rapid inflation or deflation in the prices of the
Company's products; the Company's ability to execute and the
effectiveness of a store consolidation, including the Company's
ability to retain the revenue from customer accounts merged into
another store location as a result of a store consolidation; the
Company's available cash flow; the Company's ability to identify
and successfully market products and services that appeal to its
customer demographic; consumer preferences and perceptions of the
Company's brand; uncertainties regarding the ability to open new
locations; the Company's ability to acquire additional stores or
customer accounts on favorable terms; the Company's ability to
control costs and increase profitability; the Company's ability to
retain the revenue associated with acquired customer accounts and
enhance the performance of acquired stores; the Company's ability
to enter into new and collect on its rental or lease purchase
agreements; the passage of legislation adversely affecting the
rent-to-own industry; the Company's compliance with applicable
statutes or regulations governing its transactions; changes in
interest rates; adverse changes in the economic conditions of the
industries, countries or markets that the Company serves;
information technology and data security costs; the impact of any
breaches in data security or other disturbances to the Company's
information technology and other networks and the Company's ability
to protect the integrity and security of individually identifiable
data of its customers and employees; changes in the Company's stock
price, the number of shares of common stock that it may or may not
repurchase, and future dividends, if any; changes in estimates
relating to self-insurance liabilities and income tax and
litigation reserves; changes in the Company's effective tax rate;
fluctuations in foreign currency exchange rates; the Company's
ability to maintain an effective system of internal controls; the
resolution of the Company's litigation; and the other risks
detailed from time to time in the Company's SEC reports, including
but not limited to, its Annual Report on Form 10-K for the year
ended December 31, 2016. You are cautioned not to place undue
reliance on these forward-looking statements, which speak only as
of the date of this press release. Except as required by law, the
Company is not obligated to publicly release any revisions to these
forward-looking statements to reflect the events or circumstances
after the date hereof or to reflect the occurrence of unanticipated
events.
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version on businesswire.com: http://www.businesswire.com/news/home/20170328005563/en/
Contacts for Rent-A-Center, Inc.:Investors:Maureen
ShortInterim Chief Financial
Officer972-801-1899maureen.short@rentacenter.comorOkapi Partners
LLCBruce Goldfarb / Chuck Garske / Teresa
Huang212-297-0720orMedia:Joele Frank, Wilkinson Brimmer
KatcherKelly Sullivan / James Golden / Aura
Reinhard212-355-4449
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