Rent-A-Center Says Not Exploring Sale, Defies Activist Investor

Markets Reuters

Furniture retailer Rent-A-Center Inc , under pressure from activist investor Engaged Capital LLC to sell itself, said on Monday that a sale of the company not the best strategy to maximize shareholder value.

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The company also said founder Mark Speese, its interim chief executive, would take on the role full time, and outlined steps to improve profitability, choosing to move ahead with what Engaged Capital had called a "risky public turnaround" strategy.

Engaged Capital, which has a near 13 percent stake in Rent-A-Center, has said that the company's board could be acting based on "personal loyalty" to Speese, who is also chairman of the board. It has also pushed for board changes.

Speese, who was Rent-A-Center's CEO from October 2001 through January 2014, was named interim CEO in January this year, replacing Robert Davis.

The steps Rent-A-Center laid out on Monday to boost profitability include reducing the number of employees in stores. It has said it would sell more higher-end, aspirational products.

Engaged Capital was not immediately available for comment outside business hours on the latest developments.

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Rent-A-Center last month adopted a "poison pill" to fend off pressure from Engaged Capital.

The company's shares were up 6 percent at $10.18 in low volumes premarket on Monday. (Reporting by Sruthi Ramakrishnan in Bengaluru; Editing by Savio D'Souza)