Rent-A-Center Inc (NASDAQ:RCII) shares were soaring on Tuesday as reports suggested that the company may be preparing itself for a buyout.
The furniture and electronics rent-to-own company is being considered by buyout shop Vintage Capital Management LLC, along with other bidders that are reviewing Rent-A-Center. Such a sale could be announced in a month or two, according to sources familiar with the situation.
The rent-to-own provider has received a number of bids to acquire the whole company, which is currently in active discussions with potential buyout candidates. Rent-A-Center said back in October that it had retained JPMordan Securities LLC and was rolling out a process to explore strategic alternatives.
This announcement came only five months after Glenn Welling and his activist fund Engaged Capital LLC were able to successfully install a minority slate of three dissident director candidates to the board of Rent-A-Center.
Back then, a sale seemed unlikely as the review did not proceed as expected as CEO Mark Speese was not in favor of such a sale happening. However, Speese left the company in January and was replaced by Mitch Fadel as CEO, a director and former RCII president who was added to the company’s board in June as part of Welling and his company’s minority-slate of director candidates.
Rent-A-Center ex-chairman Steven Pepper also left in October, expressing his opposition to the sale before leaving.
RCII stock was up about 7.8% on Tuesday.