CORRECTING and REPLACING PHOTO Rent-A-Center, Inc. Highlights How Engaged Capital is Seeking to Advance Its Own Interests at the Expense of All Other Stockholders
Engaged Capital Has Proposed No Plan Aside From Running a Self-Serving and Value Destructive Sale Process
Urges Stockholders to Protect Their Investment by Voting “FOR” Each of Rent-A-Center’s Highly Qualified Director Nominees on the WHITE Proxy Card
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The release reads:
Engaged Capital Has Proposed No Plan Aside From Running a Self-Serving and Value Destructive Sale Process
Urges Stockholders to Protect Their Investment by Voting “FOR” Each of Rent-A-Center’s Highly Qualified Director Nominees on the WHITE Proxy Card
The Rent-A-Center Board unanimously recommends stockholders vote the WHITE
proxy card “FOR” the Company’s
highly-qualified and experienced director nominees:
Rent-A-Center’s letter to stockholders and other materials regarding the Board's recommendation for the 2017 Annual Meeting of Stockholders can be found at http://investor.rentacenter.com.
The full text of the letter is below:
TIME IS SHORT!
VOTE “FOR” THE EXECUTION OF THE BOARD’S
STRATEGIC PLAN AND “FOR” YOUR BOARD’S NOMINEES ON THE WHITE CARD TODAY –
BY SIGNING, DATING AND RETURNING THE WHITE PROXY CARD IN THE
POSTAGE-PAID ENVELOPE PROVIDED
Dear Rent-A-Center Stockholder,
We are less than three weeks away from the 2017 Rent-A-Center Annual
Meeting of Stockholders, on
In seeking representation on the Rent-A-Center Board,
Notwithstanding Engaged Capital’s short-term time horizon and interest,
the Rent-A-Center Board and management team have held extensive
discussions with
We urge you to protect the value of your investment in
ENGAGED CAPITAL: SHORT-TERM FOCUS AND HISTORY OF STOCKHOLDER VALUE DESTRUCTION
-
Short-term investor:
Engaged Capital exited its ten most recent activist campaigns after an average holding period of only ~13 months.1 -
Consistent value destruction: Companies at which
Engaged Capital has secured a Board seat have underperformed theS&P 500 index by an average of 7.8% from the time of Engaged Capital’s new director appointments. Excluding those companies that were sold subsequent to Engaged Capital’s new director appointments, underperformance relative to theS&P 500 was an average of 20.7%.2
The accompanying chart illustrates outcomes for stockholders in three
situations in which
In short,
ENGAGED CAPITAL HAS DEMONSTRATED ZERO UNDERSTANDING OF
RENT-A-CENTER’S BUSINESS
AND HAS OFFERED NO PLAN BEYOND
RUNNING A SELF-SERVING SALE PROCESS
The Rent-A-Center Board of Directors takes its fiduciary responsibilities to stockholders seriously. The Board regularly reviews the Company’s strategic priorities and opportunities, and assesses them against a variety of strategic options. Everything we do is in the context of creating value for ALL of our stockholders.
The Rent-A-Center Board thoroughly reviewed Engaged Capital’s single,
self-serving suggestion of immediately launching an opportunistic sale
process. The Board determined that continuing to execute on our
strategic plan will deliver substantially more value to all stockholders
than conducting a sale process at this time, which will only transfer
that upside to any potential buyers. Aside from an outright sale of the
Company,
Rent-A-Center Board and Management |
Engaged Capital: No Operating Plan, No Ideas, No Strategy |
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√ Rent-A-Center has a comprehensive turnaround plan carefully designed to grow and improve all segments of the business |
x Engaged Capital has not demonstrated an understanding of Rent-A-Center’s business, the rent-to-own industry or the attractive stockholder value potential embedded in our strategic plan |
|||
√ Plan was developed via a thoughtful and thorough process with input from the entire Board and senior management team |
x Engaged Capital has offered no view on an operating strategy |
|||
√ Plan includes specific, highly-actionable items the Company has and will continue to pursue in each of its segments to turn the business around and drive value for all stockholders |
x Engaged Capital’s only proposal is to sell the Company now to benefit itself, while shares are trading near multi-year lows |
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√ Strategic plan has already produced positive results and is being overseen by an experienced, independent and diverse Board that is committed to driving change and progress |
x Selling the Company today would deprive existing stockholders of the significant upside embedded in the Board’s strategic plan |
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We believe that voting for Engaged Capital’s nominees is a vote for
value destruction and would usurp the opportunity for
PROTECT THE VALUE OF YOUR INVESTMENT – VOTE THE ENCLOSED WHITE PROXY CARD TODAY
In order to preserve the value of your investment and ensure the Company
continues to execute on its strategic plan, it is important to support
the Rent-A-Center Board’s compelling slate of nominees. Engaged
Capital’s nominees will answer to only one stockholder and blindly
pursue its agenda to immediately run an opportunistic sale process,
despite how value destructive it may be for our stockholders other than
Your Board unanimously recommends that stockholders vote “FOR”
Rent-A-Center’s three highly-qualified candidates –
We urge you to protect the value of your investment and disregard
Engaged Capital’s self-serving campaign by simply discarding any blue
proxy card that you may receive from
Thank you for your continued support.
The Rent-A-Center Board of Directors:
Mark E. Speese |
Michael J. Gade |
Jeffery M. Jackson |
|||||||||||||||||||
J.V. Lentell |
Steven L. Pepper |
Leonard H. Roberts |
Rishi Garg |
||||||||||||||||||
If you have any questions, or need assistance voting your WHITE proxy card, please contact:
1212 Avenue of the
Telephone: (212) 297-0720
Toll-Free:
(877) 259-6290
Email: Info@okapipartners.com
About
A rent-to-own industry leader,
Forward-Looking Statements
This press release and the guidance above contain forward-looking
statements that involve risks and uncertainties. Such forward-looking
statements generally can be identified by the use of forward-looking
terminology such as "may," "will," "expect," "intend," "could,"
"estimate," "should," "anticipate," "believe," or “confident,” or the
negative thereof or variations thereon or similar terminology. The
Company believes that the expectations reflected in such forward-looking
statements are accurate. However, there can be no assurance that such
expectations will occur. The Company's actual future performance could
differ materially from such statements. Factors that could cause or
contribute to such differences include, but are not limited to: the
general strength of the economy and other economic conditions affecting
consumer preferences and spending; factors affecting the disposable
income available to the Company's current and potential customers;
changes in the unemployment rate; difficulties encountered in improving
the financial and operational performance of the Company's business
segments; the Company’s chief executive officer and chief financial
officer transitions, including the Company’s ability to effectively
operate and execute its strategies during the interim period and
difficulties or delays in identifying and/or attracting a permanent
chief financial officer with the required level of experience and
expertise; failure to manage the Company's store labor and other store
expenses; the Company’s ability to develop and successfully execute
strategic initiatives; disruptions, including capacity-related outages,
caused by the implementation and operation of the Company's new store
information management system, and its transition to more-readily
scalable, “cloud-based” solutions; the Company's ability to develop and
successfully implement digital or E-commerce capabilities, including
mobile applications; disruptions in the Company's supply chain;
limitations of, or disruptions in, the Company's distribution network;
rapid inflation or deflation in the prices of the Company's products;
the Company's ability to execute and the effectiveness of a store
consolidation, including the Company's ability to retain the revenue
from customer accounts merged into another store location as a result of
a store consolidation; the Company's available cash flow; the Company's
ability to identify and successfully market products and services that
appeal to its customer demographic; consumer preferences and perceptions
of the Company's brand; uncertainties regarding the ability to open new
locations; the Company's ability to acquire additional stores or
customer accounts on favorable terms; the Company's ability to control
costs and increase profitability; the Company's ability to retain the
revenue associated with acquired customer accounts and enhance the
performance of acquired stores; the Company's ability to enter into new
and collect on its rental or lease purchase agreements; the passage of
legislation adversely affecting the Rent-to-Own industry; the Company's
compliance with applicable statutes or regulations governing its
transactions; changes in interest rates; adverse changes in the economic
conditions of the industries, countries or markets that the Company
serves; information technology and data security costs; the impact of
any breaches in data security or other disturbances to the Company's
information technology and other networks and the Company's ability to
protect the integrity and security of individually identifiable data of
its customers and employees; changes in the Company's stock price, the
number of shares of common stock that it may or may not repurchase, and
future dividends, if any; changes in estimates relating to
self-insurance liabilities and income tax and litigation reserves;
changes in the Company's effective tax rate; fluctuations in foreign
currency exchange rates; the Company's ability to maintain an effective
system of internal controls; the resolution of the Company's litigation;
and the other risks detailed from time to time in the Company's
Additional Information and Where to Find It
The Company, its directors, executive officers and other employees may
be deemed to be participants in the solicitation of proxies from the
Company’s stockholders in connection with the matters to be considered
at Rent-A-Center’s 2017 Annual Meeting. On
1 Uses stake at 13F reporting dates to determine ownership;
campaigns at:
2
Calculated as total compound stockholder return from time of Engaged
nominee appointment through the present (or, in the case of a sale,
through the closing date), including dividend reinvestment.
3
Source: Company filings, FactSet, as of 5/17/17. Data runs from date
4
These investment illustrations do not capture the possible corporate
governance risks that may arise if Engaged Capital’s nominees are
elected to the Rent‐A‐Center Board. For example,
View source version on businesswire.com: http://www.businesswire.com/news/home/20170522005424/en/
Source:
Investors:
Maureen Short, 972-801-1899
Interim Chief
Financial Officer
maureen.short@rentacenter.com
or
Okapi
Partners LLC
Bruce H. Goldfarb / Chuck Garske / Teresa Huang
212-297-0720
or
Media:
Joele
Frank, Wilkinson Brimmer Katcher
Kelly Sullivan / James Golden /
Matthew Gross
212-355-4449