(This story corrects source to ‘Vintage Capital’ from ‘Rent-A-Center’ in Jan. 19 story.)
(Reuters) - Buyout firm Vintage Capital Management LLC has agreed not to raise its stake in acquisition target Rent-A-Center Inc (RCII.O) or seek to gain control of its board as they discuss a potential deal, Vintage Capital said on Friday.
Vintage Capital made a new, but lowered $693 million offer to buy Rent-A-Center in November after the rent-to-own furniture retailer said it was exploring strategic options.
The buyout firm, which has a 5.9 percent stake in Rent-A-Center, signed a non-disclosure agreement regarding its offer on Jan. 17, which also included a so-called standstill provision that generally lasts for a year, Vintage Capital said in a regulatory filing.
Besides preventing Vintage Capital from raising its stake in Rent-A-Center or seeking board representation, the standstill provision also prevents the buyout firm from joining any proxy contest against the company.
Rent-A-Center has been under pressure from activist hedge funds Marcato Capital Management LP and Engaged Capital LLC to sell itself, with Marcato arguing that an overhaul of the company could be best achieved in the hands of private owners.
Last July, Rent-A-Center rejected Vintage Capital’ offer of $800 million. Reuters has reported that even before that, the company had snubbed takeover interest from private equity firms HIG Capital and Lone Star Funds.
Rent-A-Center Chief Executive Mark Speese resigned earlier this month.
Reporting by Uday Sampath in Bengaluru; Editing by Savio D'Souza