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B. Riley Financial sides with Vintage Capital, calling Rent-A-Center’s merger termination invalid

The rent-to-own company agreed to be acquired by Vintage’s affiliate back in June in a $1.37 billion deal
Front of a Rent A Center store
Rent-A-Center operates around 2,300 stores in the US, Canada, Mexico and Puerto Rico

Rent-A-Center Inc (NASDAQ:RCII) announced Tuesday that it was scrapping its potential merger with Vintage Capital Management LLC, but Vintage issued a statement calling the termination invalid.

B. Riley Financial, which has been working on the deal as an advisor, issued a statement of its own Wednesday, siding with Vintage.

READ: Winnebago's fiscal 1Q sales growth drives earnings beat

Shares of Rent-A-Center jumped nearly 8% to US$14.05 in Wednesday pre-market trading.

B. Riley said the termination of the deal constitutes "a material breach of the merger agreement", echoing Vintage’s previous statement.

The rent-to-own company agreed to be acquired by an affiliate of Vintage for $1.37 billion back in June.

However, after reviewing its current financial and operational performance, Rent-A-Center decided to scrap the deal.

The company has also pointed out Vintage’s obligation to pay a $126.5 million reverse breakup fee.

Rent-A-Center will host a conference call on Thursday to discuss its 2019 financial forecast.

The Texas-based company operates around 2,300 stores in the US, Canada, Mexico and Puerto Rico.

 

Contact Lenore Fedow at [email protected]

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