In documents filed with the SEC on Thursday, Aaron Rents
reported the purchase of 300,000 shares of competitor Rainbow Rentals common
stock. This purchase represents more than 5% of Rainbow's outstanding shares.
The purchase took place in 2 separate transactions of 150,000 shares each on
Aug 19th, and Sep 30. Aarons paid $4.75 per share for a total investment of
RTO Online contacted Gil Danielson, Aaron Rents Chief Financial Officer, for
comment. Mr. Danielson stated that this transaction was viewed strictly as an
investment opportunity. "With the depressed stock price, it's a good value", Mr.
When asked directly if Aaron Rents intends to buyout Rainbow Rentals, Mr.
CFO, Exec VP, Director
"If Rainbow ever wanted to do anything, we would certainly want to be
Officials from Rainbow would not comment beyond what Aaron Rents released in
13D filed with the SEC.
Aaron Rents has purchased the stock of other companies as an investment in
the past, but seldom this heavily, and never in it's own sector.
While 300,000 shares is a little over 5% of total outstanding shares, it is
more than 11% of the float, last reported at 2.6 million
shares. Rainbow stock has fallen over 24% in the last 12 months, but has
outperformed a struggling S&P by 2.6%.
While SEC documents state, and Aaron Rents officials confirm, that no merger
or buyout is in the works, one has to wonder about a marriage between these two
companies. The combined force of the 3rd and 4th largest rent to own companies
in the US would be something to behold.
Rainbow and Aaron Rents operating philosophies are actually very similar. Widely separated,
large footprint stores that consistently deliver double the US average for
annual revenue per location.
update: Rainbow stock (RBOW)
closed up 14.5% to $6.24 per share. Aaron Rents (RNT)
was up only slightly, 0.38% to close at $21.10.
The total number of outstanding shares owned by the public
that are available for trading. The float is calculated by
subtracting restricted shares from outstanding shares.
RBOW is very thinly held, the companies float is only 44%