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February 7, 2014
09:51 EDTAAN, CONN, RCIIAaron's jumps following buyout offer despite weak outlook
Shares of Aaron's (AAN), which offers consumer electronics, computers, furniture, and household appliances to customers via leases and lease-to-own arrangements, are surging despite the company's weak quarterly results and gloomy outlook after a shareholder made a $30.50 per share takeover offer. WHAT'S NEW: This morning, Vintage Capital, which holds about a 9.5% stake in Aaron's, disclosed that it sent a letter to the company's board containing a non-binding proposal to acquire the company for $30.50 per share of common stock. In its letter, the investor wrote that on three separate occasions since 2011, Vintage privately submitted "bona fide offers" to acquire 100% of the outstanding common stock of Aaronís at "significant premiums" to the then-current market prices. "Each of our offers was summarily ignored by the Board of Directors at the expense of your unknowing stockholders," Vintage stated, adding that it is the firm's "strong belief that Aaronís is at a crossroads that will culminate with a sale of the company." WHAT'S NOTABLE: Aaron's reported fourth quarter adjusted earnings per share of 30c, which fell within the company's lowered guidance of 27c-31c that it had issued in January. Aaron's also reported that is same-store sales in the quarter fell 0.9% and that its customer count grew 'only slightly' in 2013. For the fourth quarter, revenues decreased 2% to $553.9 million and the company said it will take several quarters of increasing the customer base to significantly grow revenue and earnings. Aaron's CEO Ronald Allen stated that 2013 was "a year of challenges and change" for the company, adding that growing revenues and adding customers has been "difficult with the ongoing economic pressures on low to middle income consumers." Aaron's guided to an earnings range for the new year that also fell below the consensus estimate at its midpoint. PRICE ACTION: In early morning trading, Aaron's jumped more than 16% to trade at $31.50, which is $1.00 above the offer made by Vintage Capital. OTHERS TO WATCH: Other retailers competing with Aaron's include Rent-A-Center (RCII) and Connís (CONN), both of which are lower on the session.
News For AAN;RCII;CONN From The Last 14 Days
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April 17, 2014
10:14 EDTAANVintage withdraws $30.50 buyout offer to Aaron's, will mount proxy contest
Vintage Capital Management, the second largest shareholder of Aaron's, announced that it has delivered a letter to the independent directors of Aaron's, in which VCM withdrew its previously-announced offer to acquire Aaron's for $30.50 per share in cash in light of the company's recent acquisition of Progressive Finance and continued poor performance. The letter also confirmed that VCM will proceed with a proxy contest at this year's annual meeting and asked Aaron's to allow shareholders to choose the candidates of their choice at the annual meeting.
10:13 EDTAANVintage Capital withdraws $30.50 per share cash offer to acquire Aaron's
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April 15, 2014
12:18 EDTRCII, CONN, AANAaron's slides after cutting Q1 guidance, rejecting Vintage bid
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12:04 EDTAANAaron's sees FY15 cash EPS $2.55-$2.80 following Progressive acquisition
Aaron's sees FY15 revenue for Aaron's + Progressive of $3.25B-$3.35B. Guidance may not compare to consensus of $1.97 for EPS and $2.36B for revenue in FY15.
12:02 EDTAANAaron's sees FY14 cash EPS $2.05-$2.20 following Progressive acquisition
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09:16 EDTAANOn The Fly: Pre-market Movers
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09:00 EDTAANAaron's falls 4.8%
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07:17 EDTAANAaron's to host conference call
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07:08 EDTAANAaron's calls Vintage Capital's offer 'inadequate'
In an open letter to shareholders, Aaron's said that "During the Board's process we received a proposal from Vintage Capital Management to acquire all of the outstanding shares of Aaron's for $30.50 per share. Following the review of the proposal by the Transaction Committee of the Board, as well as our financial and legal advisors, our Board has unanimously rejected Vintage's offer as inadequate, illusory and not in the best interests of Aaron's shareholders." The company also announced a strategic plan focused on its core business, and specifically will: "Renew our focus on same store revenue growth for our core portfolio, through improved execution, optimization of merchandising and pricing and an enhanced go-to-market strategy; Refine and grow our online platform; Drive cost efficiency to recapture margin, including through SG&A cost savings and rationalizing underperforming stores; Moderate new company-operated store growth to 2-3% per year; and Strengthen and grow the franchise store base. Additionally, we will target an overall debt-to-capitalization ratio of 20%, and use excess cash to continue to return capital to our shareholders... Overall, we will continue to support franchisees opening locations at a rate of approximately 3-4% per year as they continue to grow and build the Aaron's brand." The company also announced that CFO Gil Danielson has stepped down from the Board, effective immediately; he will continue to serve as CFO.
07:08 EDTAANAaron's acquires Progressive Finance Holdings for $700M
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07:05 EDTAANAaron's says effect of winter weather to negatively impact Q1 EPS by 5c-6c
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07:04 EDTAANAaron's cuts Q1 EPS view to 51c-54c from 57c-62c, consensus 59c
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07:03 EDTAANAaron's cuts Q1 EPS, revenue guidance

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