Aaron's, Inc. AAN, the leading
lease-to-own specialty retailer that offers flexible payment options for
credit-challenged individuals, today announced that the Chairman of its Board
of Directors, Ray Robinson, has sent a letter to Brian R. Kahn, Managing
Member of Vintage Capital Management LLC ("Vintage"), in response to the
misleading and inaccurate letter published by Vintage on April 29, 2014.
Aaron's logo
Following is the full text of the letter:
April 30, 2014
Brian R. Kahn, Managing Member
Vintage Capital Management LLC
4705 S Apopka Vineland Rd
Orlando, FL 32819
Dear Brian:
I have received your letter dated April 29, 2014, and I am both disappointed
and frustrated that you would choose to disclose an account of discussions
that we mutually agreed would remain confidential. As you know, we reached
out to you in good faith to attempt to negotiate a settlement to avoid a
costly, distracting and unnecessary proxy contest that you have initiated
and that is not in the best interests of all of Aaron's shareholders.
We would like nothing better than to be able to focus our full attention on
integrating our recent purchase of Progressive Finance and implementing the
initiatives we have announced to maximize returns on our existing core
business. Unfortunately, given the grossly inaccurate and misleading nature
of your letter, I can see no alternative but to make sure that Aaron's
shareholders understand the following facts:
o As you know, in order to avoid a proxy contest, I did propose that the
Board would consider adding you as a director, subject to the resolution
of the antitrust and fiduciary duty concerns presented by your control
of Buddy's Home Furnishings, a direct competitor of Aaron's.
Accordingly, you agreed to resolve our antitrust and fiduciary duty
concerns by resigning from all operational control of Buddy's and from
its board, in order to be named an Aaron's director.
o You confirmed that you were aware of the concerns about the
circumstances of Ken Butler's departure from Aaron's, as well as the
details of Mr. Butler's separation agreement. You stated that you
understood those concerns and, as a result, early in our discussions,
you felt it was appropriate to remove Mr. Butler from your slate of
nominees.
o We proposed that you agree not to engage in a proxy contest until after
the Aaron's 2015 Annual Meeting, to allow us to focus on the integration
of Progressive into our business. The last I heard from you, you
indicated you were thinking through the circumstances under which you
would consider such an arrangement.
We entered into discussions with you because we believed it was prudent to
explore whether we could find a path forward that made sense for Aaron's and
our shareholders. However, as a result of our discussions, your statements
and proposals have raised significant concerns on the part of the Aaron's
Board that you are interested in obtaining some sort of personal economic
advantages through your dealings with Aaron's. In particular, we are
concerned that your interests with regard to the controlling investment you
hold in Buddy's, a direct competitor of Aaron's, motivates the desire on
your part to attempt to acquire all or parts of Aaron's business, or to
leverage Aaron's supply chain and distribution infrastructure, at a price
advantageous to you or without paying anything to gain such advantages.
This is consistent with the comments you made to us and similar to your
recent comments reported by the media: "'If we own Aaron's, we can very
rapidly open Buddy Stores' by using its distribution network and existing
merchandise, he said."^1
We have engaged Spencer Stuart to assist us as we continue to prioritize
refreshing the Board to add to the overall skills and experience represented
by our directors, and in that regard, have added three new independent
directors in the last four years. I will continue to meet with many of
Aaron's other shareholders to listen to their views and feedback on the path
forward for Aaron's. I am confident they will agree that creating a path
for you to take control of the Company through a multi-year proxy fight
without paying for it, let alone paying a fair premium, is not in the best
interests of all of Aaron's shareholders.
Sincerely,
/s/ Ray Robinson
Ray Robinson
Chairman of the Board of Directors
Aaron's, Inc.
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