Rent-A-Center's Stock Rockets After Disclosing Buyout Bid, That It Rejected

Shares of Rent-A-Center Inc. rocketed 17% in premarket trade, after the household durable goods leasing company disclosed that it had received an unsolicited buyout bid that valued the stock at a 35% premium, that it rejected. The company said private-equity firm Vintage Capital Management LLC proposed on June 20 a buyout for $15 a share, which was well above Monday's closing price of $11.10, and would value the company at about $798 million. Rent-A-Center's board of directors said in the filing that it determined that Vintage's bid "significantly undervalues" the company, and the company's current strategic plan is expected to deliver greater value to its shareholders than Vintage's "inadequate and opportunistic proposal." The company's strategic plan includes strengthening its core U.S. business, growing its Acceptance Now business, and leveraging technology investments to expand distribution and integrate retail and online offerings. The stock has slipped 1.3% year to date through Monday, while the S&P 500 has gained 8.4%.