The Aaron’s Company (NYSE: AAN) is up a whopping 35% in premarket on Monday after announcing a $504 million agreement with IQVentures Holdings.
IQVentures values Aaron stock at $10.10
IQVentures has agreed to pay $10.10 for each share of Aaron’s in cash which represents about a 34% upside on their previous close.
$AAN will remain headquartered in Atlanta and operate under its existing brand name albeit as a privately held company once the transaction is complete. John W. Robinson III – chairman of the board of The Aaron’s Company said in a press release today:
The Board conducted a thorough review of our strategic options and ultimately determined that a sale to IQVentures represented the best way to maximise shareholder value.
AAN board of directors, therefore, have unanimously approved the IQVentures deal. Aaron’s stock is still down more than 10% versus the start of 2024.
CEO Lindsay’s remarks on IQVentures deal
IQVentures expects the Aaron’s transaction to close before the start of 2025 provided that it satisfies customary closing conditions including regulatory approvals.
Douglas Lindsay – chief executive of $AAN expects the $504 million cash agreement to help his company “achieve its long-term potential”. It will enable The Aaron’s Company to “accelerate its omnichannel strategy and operational efficiency initiatives”, he added in a statement today.
The news arrives about a month after the New York listed firm reported its financial results for the first quarter that topped Street estimates.
Note that Aaron’s stock pays a rather lucrative dividend yield of 6.63% at writing.
Aaron’s per-share earnings were down in fiscal Q1
The Aaron’s Company earned 66 cents a share in its latest reported quarter which was down from 87 cents per share a year ago.
Still, its revenue at $554 million came in well above $456 million in the first quarter of last year. CEO Lindsay said at the time”
We remain focused on our strategic priorities of improving operational performance, streamlining our cost structure, and innovating our business to better serve customers. Our management team and Board remain highly engaged and committed to taking all actions that will deliver additional value for our shareholders.
Wall Street currently has a consensus “hold” rating on Aaron’s stock.
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