(Reuters) – Aaron’s Inc (AAN.N), a U.S. electronics and furniture rental chain, has turned down several informal takeover approaches in the last 12 months from peer Rent-A-Center Inc (RCII.O), according to people familiar with the matter.
The rent-to-own retail sector has suffered in the last few years, as low-income customers cut spending. Rent-A-Center’s overtures illustrate that mounting competition is putting pressure on some retailers to consider acquisitions.
Rent-A-Center’s latest approach to Aaron’s, which has a market capitalization of roughly $2.5 billion, took place earlier this year but did not lead to serious discussions between the two companies, the sources said this week.
Aaron’s resisted negotiating a deal because it favors its standalone prospects and does not view Rent-A-Center’s stock as a valuable acquisition currency, the sources added.
There are currently no active talks between the companies, they said. It was unclear if Rent-A-Center, which competes with Aaron’s, remained interested in acquiring Aaron’s.
The sources asked not to be identified because the talks were confidential. A representative for Aaron’s declined to comment. Rent-A-Center did not immediately respond to requests for comment.
Atlanta-based Aaron’s, which provides rent-to-own products such as couches, laptops and televisions, last year agreed to give two board seats to its second largest shareholder, Vintage Capital Management LLC, which had tried to buy the company for $2.3 billion.
Shares of Plano, Texas-based Rent-A-Center have fallen more than 26 percent in the last 12 months as it struggles to maintain growth in its core U.S. market.
Rent-A-Center rallied as much as 14.5 percent on Tuesday after the company topped analysts’ earnings expectations in the first quarter.
A weak retail environment and increased competition has led to a string of deals, as competing companies merged in order to increase scale. Staples (SPLS.O) acquired Office Depot (ODP.O), Signet Jewelers Ltd (SIG.N) bought Zale Corp, and Men’s Wearhouse Inc’s (MW.N) purchased Jos. A Bank.