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July 29, 1987


By CBR Staff Writer

Having walked away from United Scientific Holdings Plc, Thorn EMI Plc has gone for the Big One in the US, making it clear that Dixons Plc is not the only UK consumer electronics retailer eager to flex its muscles in the US. Thorn is leaning on the skills of its UK and international rental businesses rather than its Rumbelows consumer electronics arm in going for Rent-a-Center Inc of Wichita, Kansas, which rents TVs – 35%, VCRs – 14%, stereos – 13%, appliances – 19%, and furniture – 19% out of 270 company stores and a further 168 franchises. Thorn is making a tender offer of $27 a share, valuing the company at $594m, UKP371m, to be paid in cash. Agreement from two major shareholders, and options on new shares would give Thorn 50.6% of the expanded equity, so unless a rival bidder comes in, Thorn looks to be home and dry. Rent-a-Center did $8.5m net on sales of $128.8m in the nine months to April 30 after $9.9m on sales of $138.5m in the year to July 31 1986. Thorn will pay for the acquisition by way of a combination of placing and rights issue in which it issue 53.4m new shares, about 20% of the expanded equity, at 695 pence. Shareholders will have the right to subscribe for one new share for every 4.38 held. The plan was greeted warily by the market and Thorn shares fell 12p to 744p.

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