Rent-A-Center announced that it has terminated its merger agreement with Vintage Capital Management after the deal expired on Dec. 17 without an extension. However, Vintage stated that the termination is invalid and represents a breach of the companies’ merger agreement.
Rent-A-Center and Vintage have each received a second request from the FTC, but neither asked for an extension to March 17, 2019. The Rent-A-Center Board of Trustees elected to terminate the merger due to the “current financial and operational performance of the company,” according to a statement.
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Rent-A-Center has been undergoing a turnaround effort that includes shuttering underperforming stores, which resulted in a 3.7% same-store sales increase for the quarter ended June 30, 2018. The retailer expects its cost-cutting efforts to generate more than $100 million in annual savings, with approximately $70 million of the total realized in 2018.
Vintage initially agreed to acquire Rent-A-Center for approximately $1.36 billion in June 2018. Under the terms of the agreement, Vintage Capital would have to pay Rent-A-Center a reverse breakup fee of $126.5 million within three business days.
