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Aaron's drops suit against Vintage Capital

NEW YORK (AP) — Rent-to-own furniture company Aaron’s dropped its lawsuit against Vintage Capital Management after the company withdrew its offer to buy the company.

Aaron’s had sued Vintage to compel it to disclose information about its financing for its proposal.

Vintage had offered to buy the Atlanta company in February for $30.50 per share, or about $2.2 billion. Aaron’s rejected that offer last week and announced a $700 million acquisition of Progressive Finance.

Subsequently Vintage withdrew its offer to buy Aaron’s.

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Vintage is the second-largest holder of Aaron’s shares, according to FactSet, with a stake of 7.3 million shares, or about 10.1 percent. It is also one of the largest franchise operators of Aaron’s stores. When the offer was announced it came at a 12.7 percent premium to the latest closing price of Aaron’s shares.

Aaron’s sells and leases furniture and accessories and offers flexible payment plans for people with credit problems. It runs about 2,130 stores in the U.S. and Canada, but its low- to middle-income shoppers are still dealing with difficult economic conditions. The company lowered its guidance on Tuesday and said that in addition to economic concerns, severe winter weather also hurt its sales.