AMARILLO, Texas, March 17, 2014 /PRNewswire/ -- Hastings
Entertainment, Inc. (NASDAQ: HAST), a leading multimedia
entertainment retailer ("Hastings"), today reported that it has
entered into an Agreement and Plan of Merger (the "Merger
Agreement") with Draw Another Circle, LLC ("Parent") and Hendrix
Acquisition Corp. ("Merger Sub"), which are each wholly-owned,
directly or indirectly, by Joel
Weinshanker. Mr. Weinshanker is the President and sole
shareholder of National Entertainment Collectibles Association,
Inc., which holds approximately 12% of Hastings' outstanding shares
("NECA"). Pursuant to the Merger Agreement, Merger Sub will
be merged with and into Hastings, with Hastings surviving the
merger as a wholly-owned subsidiary of Parent, and each share of
Hastings common stock held by a shareholder of Hastings (other than
Mr. Weinshanker and his affiliates) will, upon completion of the
merger, be converted into the right to receive a cash payment of
$3.00 per share.
The $3.00 per share price
represents a premium of approximately 57.1% over Hastings' closing
share price on March 14, 2014 and a
premium of approximately 61.3% over the average trading price of
Hastings' common shares for the last 30 trading days ending on
March 12, 2014. The transaction
is valued at approximately $21.4
million.
Hastings' Board of Directors, acting upon the unanimous
recommendation of a special committee of the board directors
consisting of independent directors (the "Special Committee"), has
unanimously approved the Merger Agreement and the transactions
contemplated by the Merger Agreement and has resolved to recommend
that Hastings' shareholders vote in favor of approving the Merger
Agreement at a special meeting of the shareholders called
specifically for such purpose.
"NECA is a significant supplier of movie, book and video game
merchandise and collectibles to the Hastings superstores, and we've
had a close and growing business relationship with Mr. Weinshanker
over the last decade. Mr. Weinshanker, through his
affiliation with the estates of Marilyn
Monroe, Elvis Presley and
Muhammad Ali, and his company's
management of Graceland, is one of the leading drivers of the
lifestyle industry, and we believe Hastings' business will continue
to benefit from our relationship with him and NECA," said
John H. Marmaduke, Hastings'
Chairman and CEO.
Under the terms of the Merger Agreement, the closing of the
merger, which is expected to occur in the second quarter of
calendar 2014, is subject to shareholders holding at least
two-thirds of Hastings' outstanding shares voting their shares in
favor of approving the Merger Agreement and the fulfillment or
waiver of other customary conditions, as more particularly set
forth in the Merger Agreement.
In addition, Mr. Marmaduke and related beneficial owners who,
together with Mr. Marmaduke, hold approximately 32% of Hastings'
common stock, and NECA have each entered into agreements with
Parent in which they have agreed to, among other things, vote all
shares over which they have exercisable voting power in favor of
the merger. As a result, holders of approximately 44% of the
Hastings' common stock have committed to vote for the merger.
SunTrust Robinson Humphrey and George K. Baum Capital Advisors,
Inc. are serving as financial advisors to the Special
Committee. Kelly Hart &
Hallman LLP is serving as legal advisor to Hastings, Haynes and
Boone, LLP is serving as legal advisor to the Special Committee and
Cooley LLP is serving as legal advisor to Parent and its affiliated
entities.
IMPORTANT ADDITIONAL INFORMATION WILL BE FILED WITH THE SEC
Hastings plans to file with the SEC and mail to its shareholders
a Proxy Statement in connection with the transaction. The Proxy
Statement will contain important information about Parent, Merger
Sub, Mr. Weinshanker, Hastings, the transaction and related
matters. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE PROXY
STATEMENT CAREFULLY WHEN IT IS AVAILABLE.
Investors and security holders will be able to obtain free
copies of the Proxy Statement and other documents filed with the
SEC by Hastings through the web site maintained by the SEC at
www.sec.gov or by phone, email or written request by contacting
Hastings at the following:
Address: 3601 Plains Boulevard, Amarillo, Texas 79102
Phone: (806) 677-1402
Email: dan.crow@goHastings.com
PARTICIPANTS IN THE SOLICITATION
Hastings and its directors, executive officers and certain other
members of management and employees of Hastings may be deemed
"participants" in the solicitation of proxies from shareholders of
Hastings in favor of the proposed merger. Information regarding the
persons who may, under the rules of the Securities and Exchange
Commission, be considered participants in the solicitation of the
shareholders of Hastings in connection with the proposed merger,
and their direct or indirect interests, by security holdings or
otherwise, which may be different from those of Hastings'
shareholders generally, will be set forth in the Proxy Statement
and the other relevant documents to be filed with the Securities
and Exchange Commission. You can find information about certain of
Hastings' executive officers and its directors in its Annual Report
on Form 10-K for the fiscal year ended January 31, 2013.
Safe Harbor Statement
This press release contains "forward-looking statements,"
including statements as to our belief that Hastings' business will
continue to benefit from its relationship with Mr. Weinshanker and
NECA and our expectation that the acquisition will close in the
second quarter of fiscal 2014. These forward-looking
statements are being made pursuant to the safe harbor provided by
the Private Securities Litigation Reform Act of 1995, as amended,
and are based on currently available information and represent the
beliefs of the management of Hastings. These statements are
subject to risks and uncertainties that could cause actual results
to differ materially.
These factors include, but are not limited to, (1) the
occurrence of any event, change or other circumstances that could
give rise to the termination of the Merger Agreement after it has
been signed, (2) the outcome of any legal proceedings that may be
instituted against Hastings or others following the announcement of
the Merger Agreement, (3) the inability to complete the merger due
to an insufficient number of votes by Hastings' shareholders in
favor of the Merger Agreement or the failure to satisfy other
conditions contained in the Merger Agreement, (4) the risks that
the proposed transaction disrupts current plans and operations of
Hastings, (5) the actual timing of the closing of the acquisition,
and (6) the costs, fees and expenses related to the
transaction. We undertake no obligation to affirm,
publicly update or revise any forward-looking statements, whether
as a result of new information, future events, or otherwise.
Shareholders of Hastings are cautioned not to place undue reliance
on the forward-looking statements included in the Press Release,
which speak only as of the date such statements are made.
Please refer to Hastings' annual, quarterly, and periodic reports
on file with the Securities and Exchange Commission for a more
detailed discussion of these and other risks that could cause
results to differ materially.
About Hastings
Founded in 1968, Hastings' is a leading multimedia entertainment
retailer that combines the sale of new and used books, videos,
video games and CDs, and trends and consumer electronics
merchandise, with the rental of videos and video games in a
superstore format. We currently operate 126 superstores,
averaging approximately 24,000 square feet, primarily in
medium-sized markets throughout the United States. We also
operate three concept stores, Sun Adventure Sports, located in
Amarillo, Texas and Lubbock, Texas, and TRADESMART, located in
Littleton, Colorado.
We also operate www.goHastings.com, an e-commerce Internet web
site that makes available to our customers new and used
entertainment products and unique, contemporary gifts and
toys. The site features exceptional product and pricing
offers. The Investor Relations section of our web site
contains press releases, a link to request financial and other
literature and access to our filings with the Securities and
Exchange Commission.
SOURCE Hastings Entertainment, Inc.