(Reuters) - Rent-A-Center Inc (RCII.O) said on Monday it received an increased offer to acquire the company from one of the suitors that was involved in its sale process, hours after the rent-to-own furniture retailer said it ended its strategic review.
In a letter to the company, the party said it “does not constitute an offer capable of being accepted or a binding agreement of any kind,” Rent-A-Center said.
“The (offer) letter was not accompanied by equity commitment letters that would be necessary for the company to evaluate whether to enter into an agreement with an acquisition entity possessing no assets,” Rent-A-Center said.
The company’s board would carefully consider any credible proposal with the assistance of its advisers, it said.
The company said late Sunday it had ended its strategic review and a potential sale of the company as it did not receive any proposals that met the objectives for a sale.
However, it said it will regularly review opportunities and continue with its cost-cut initiatives, which are “significantly ahead of schedule”, and expects to generate over $100 million in annual run-rate savings and realize about $70 million in savings in 2018.
Plano, Texas-based Rent-A-Center earlier expected to save $75 million to $95 million annually from the cost-cutting plans.
The company, which has been under pressure from its shareholders Engaged Capital and Marcato Capital to sell itself, rejected buyout offers last July.
The company also forecast consolidated revenue of $640 million to $660 million for the second quarter and $2.64 billion to $2.69 billion for the full year. Adjusted EBITDA is expected to be in the range of $40 million to $50 million for the second quarter, it said.
Reporting by Rama Venkat Raman in Bengaluru; Editing by Gopakumar Warrier