Rent-A-Center shares soar on privatization hopes

Rent-A-Center shares soared Tuesday on hopes that the company would do an about-face and decide to go private.

Private equity firm Vintage Capital presented the rent-to-own company’s board with an all-cash “best and final offer” of $14 a share, according to a letter sent to Rent-A-Center’s board.

Shares of the company rose 14 percent, to $12.43, in late-day trades.

“As we have communicated on numerous occasions, we are committed to completing an acquisition of RCII as quickly as possible,” Vintage Capital wrote, adding that its offer expires at 5 p.m. Friday.

Vintage’s letter comes two days after Plano, Texas-based Rent-A-Center said on Sunday that the board “unanimously determined” that previous bids it received were not a good deal for shareholders. On the heels of announcing it concluded its strategic review process, Rent-A-Center said Monday that it received an increased offer from a previous bidder whose name it did not disclose.

Rent-A-Center has been under pressure to go private over the last year from activist hedge fund Engaged Capital, which gained three seats on the company’s board last June.

Tuesday’s bid was not Vintage Capital’s first time sniffing around Rent-A-Center. Vintage Capital, which also owns Rent-A-Center rival Buddy’s Home Furnishings, bid $13 a share in November.

Reps from Rent-A-Center did not immediately respond to requests for comment.