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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) September 1, 1998
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RENT-WAY, INC.
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(Exact name of registrant as specified in its charter)
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Pennsylvania 0-22026 25-1407782
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(State or other jurisdiction of (Commission File Number) (IRS Employer Identification No.)
incorporation)
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One Rent-Way Place, Erie, Pennsylvania 16505
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(Address of principal executive offices) (Zip Code)
(814)555-5378
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(Registrant's telephone number, including area code)
Not applicable
(Former name or former address, if changed since last report)
This document consists of 3 pages
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Item 5. Other Events
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On September 1, 1998, the Registrant executed an Agreement and Plan of
Merger, dated as of September 1, 1998 (the "Merger Agreement"), between the
Registrant and Home Choice Holdings, Inc., a Delaware corporation ("Home
Choice"), pursuant to which, among other things, (a) Home Choice will merge with
and into the Registrant, (b) the Registrant will be the surviving corporation in
the merger, and (c) each stockholder of Home Choice will be entitled to receive
0.588 shares of the Registrant's common stock in exchange for each outstanding
share of Home Choice's common stock.
For further information concerning the merger, see Exhibit 99.1 hereto, the
Joint Press Release by the Registrant and Home Choice dated September 2, 1998
announcing the execution of the Agreement and Plan of Merger between the
Registrant and Home Choice, which is incorporated herein by reference.
Item 7. Financial Statements and Exhibits
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(c) Exhibits.
Exhibit No. Description
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99.1 - Joint Press Release dated September 2, 1998, announcing the
execution of the Agreement and Plan of Merger between the
Registrant and Home Choice.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
HOME CHOICE HOLDINGS, INC.
(Registrant)
Date: September 11, 1998 By: /s/ JEFFREY A. CONWAY
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Jeffrey A. Conway
Chief Financial Officer
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Exhibit 99.1
[LOGO]
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n e w s
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NASDAQ SYMBOL: RWAY
One RentWay Place, Erie, PA 16505 * 814-455-5378 * Fax 814-455-0078 *
www.rentway.com
FOR IMMEDIATE RELEASE FOR MORE INFORMATION, CONTACT:
September 2, 1998 William E. Morgenstern, CEO
(800) 736-8929
AT HOME CHOICE:
James G. Steckart, CEO
(972) 288-9327
RENT-WAY AND HOME CHOICE ANNOUNCE
EXECUTION OF MERGER AGREEMENT
ERIE, PA. and MESQUITE, TEX. -- Rent-Way, Inc. (NASDAQ-RWAY) and Home Choice
Holdings, Inc. (NASDAQ-HMCH) today announced that they have signed a definitive
agreement pursuant to which Home Choice will merge with and into Rent-Way. Upon
closing of the merger, Rent-Way will be the second largest company in the
rental-purchase industry operating 847 stores in 32 states.
Under the merger agreement, Home Choice shareholders will receive an aggregate
or approximately 9.99 million shares of Rent-Way's common stock based on an
exchange ratio of .588 Rent-Way shares for each Home Choice share. The exchange
ratio is fixed and is not subject to adjustment.
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Rent-Way, Inc.
September 2, 1998
The transaction, which has been unanimously approved by the Boards of Directors
of Rent-Way and Home Choice, is expected to be accounted for as a pooling of
interests and is also expected to be tax-free to Home Choice shareholders. The
closing of the transaction is subject to certain customary conditions,
including approvals from the shareholders of Rent-Way and Home Choice. The GDJ,
Jr. Investments Limited Partnership (controlled by George D. Johnson, Jr.,
Chairman of Home Choice) and Michael D. Walts, both significant shareholders of
Home Choice, have agreed to vote their Home Choice shares in favor of the
merger. Gerald A. Ryan and William E. Morgenstern, Chairman and Chief Executive
Officer, respectively, of Rent-Way have agreed to vote their Rent-Way shares in
favor of the merger. Pursuant to the merger agreement, both Rent-Way and Home
Choice have granted to the other an option, exercisable upon the occurrence of
certain events, to acquire shares representing 19.9 percent of its outstanding
common stock. The transaction is expected to close in the last quarter of
calendar year 1998.
The current Board of Directors and executive officers of Rent-Way will continue
in place following the merger.
William E. Morgenstern, President and Chief Executive Officer of Rent-Way,
said, "In an industry that continues to consolidate, this merger presents
Rent-Way with a unique opportunity to acquire a large number of stores in a
single transaction. Following closing, we expect to bring our significant
acquisition experience to bear by quickly and efficiently integrating Home
Choice's operations and emerging a stronger and even more dynamic company."
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Page 3 Of 4
Rent-Way, Inc.
September 2, 1998
George D. Johnson, Jr., Chairman of Home Choice, said, "Rent-Way's management
has a proven record for producing rapid and profitable growth through
acquisitions. As a result, Rent-Way has reported 19 consecutive quarters of
record revenues and earnings. Combining Home Choice's attractive store base
with Rent-Way's proven management provides an outstanding opportunity to create
long-term value for our shareholders."
Excluding transaction costs, the merger is expected to be accretive to
Rent-Way's earnings per share for fiscal year 1999.
NationsBanc Montgomery Securities LLC acted as exclusive financial advisor to
Rent-Way and Donaldson Lufkin Jenrette Securities Corporation and Stephens,
Inc. acted as exclusive financial advisors to Home Choice.
Rent-Way, Inc. operates 384 rental-purchase stores located in 21 states
primarily in the Southeast, Midwest and Northeast. Home Choice operates 463
rental-purchase stores in 25 states primarily in the Southeast, Midwest and
Southwest. Rent-Way and Home Choice rent brand name consumer merchandise such
as home entertainment equipment, furniture and major appliances on a
week-to-week or month-to-month basis under full service rental-purchase
agreements.
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Rent-Way, Inc.
September 2, 1998
This press release contains certain forward-looking statements within the
meaning of Section 27(A)(i) of the Securities Act of 1933 and Section 21E(i) of
the Securities Act of 1934 that involve known and unknown risks, uncertainties
and other factors that may cause actual results to be materially different from
any future results, performance or achievements expressed or implied by any
such statements. Such factors include, among others, the ability of Rent-Way to
improve the performance of the Home Choice stores, to integrate those stores'
profitability into Rent-Way's operations and the factors set forth in
Rent-Way's Annual Report on Form 10-K for the year ended September 30, 1997 and
Quarterly Reports on Form 10-Q for the three months ending June 30, 1998, March
31, 1998 and December 31, 1997.
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