GameStop Announces Agreement with Hestia Capital and Permit Enterprise Capital Partners
April 01 2019 - 9:00AM
GameStop Corp. (NYSE: GME) today announced that it has reached a
cooperation agreement with Hestia Capital Partners LP (“Hestia”)
and Permit Capital Enterprise Fund LP (“Permit”) under which two
new independent directors will be added to the GameStop Board of
Directors. Pursuant to the cooperation agreement, the Company will
appoint an independent director from among the candidates nominated
by Hestia and Permit. As part of the Board’s ongoing refreshment
and search efforts, the Board will appoint an additional
independent director who will be selected by the Board in
consultation with Hestia and Permit. It is anticipated that the two
new directors will join the Board on or before April 30, 2019.
Under the terms of the agreement, the two new independent
directors will be included in the Company’s slate of directors
standing for election at GameStop’s 2019 Annual Meeting of
Stockholders. The director nominated by Hestia and Permit will join
the Board’s Nominating and Corporate Governance and Compensation
Committees upon election. Following the 2019 Annual Meeting, the
GameStop Board will comprise 11 directors, nine of whom are
independent.
Pursuant to the cooperation agreement, Hestia and Permit have
agreed to withdraw their director nominations for GameStop’s 2019
Annual Meeting, effective as of the date of the appointment of one
of their nominees. They will respectively vote their shares in
favor of all of GameStop’s director nominees at the Company’s 2019
Annual Meeting and have agreed to abide by customary standstill
provisions. The complete agreement will be included as an exhibit
to a Current Report on Form 8-K, which will be filed with the U.S.
Securities and Exchange Commission.
Perella Weinberg Partners LP is acting as GameStop’s financial
advisor and Sullivan & Cromwell LLP and Pepper Hamilton LLP are
acting as its legal advisors.
About GameStopGameStop Corp., a Fortune 500
company headquartered in Grapevine, Texas, is a global,
multichannel video game and consumer electronics retailer. GameStop
operates over 5,800 stores across 14 countries. The company's
consumer product network also includes www.gamestop.com; Game
Informer® magazine, the world's leading print and digital video
game publication; ThinkGeek, www.thinkgeek.com, the premier
retailer for the global geek community featuring exclusive and
unique video game and pop culture products; and Simply Mac, which
sells the full line of Apple products, including laptops, tablets,
and smartphones and offers Apple certified warranty and repair
services.
General information about GameStop Corp. can be obtained at the
company’s corporate website. Follow @GameStop and @GameStopCorp on
Twitter and find GameStop on Facebook at
www.facebook.com/GameStop.
About Hestia CapitalHestia Capital is a
long-term focused, deep value fund that leverages the General
Partner's expertise in competitive strategy to identify and invest
in companies which it believes are undervalued due to transitory
company and/or industry disruptions, which are misunderstood by the
investment community.
About Permit Capital Enterprise FundThe Permit
Capital Enterprise Fund, through its management company, follows an
investing philosophy that seeks to identify securities trading at a
discount to intrinsic value. The investment approach is bottom-up
and focused on the valuation of the securities of individual
issuers. The management company's assessment of intrinsic value is
based on its own fundamental research as well as numerous sources
of publicly available information.
Safe Harbor This press release contains
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Such statements are based
upon management’s current beliefs, views, estimates and
expectations, including as to the Company’s industry, business
strategy, goals and expectations concerning its market position,
future operations, margins, profitability, capital expenditures,
liquidity and capital resources and other financial and operating
information. Such statements include without limitation those about
the Company’s expectations for fiscal 2018 and 2019, future
financial and operating results, projections, expectations and
other statements that are not historical facts. All statements
regarding the Board’s review of strategic and financial
alternatives and expected costs and benefits, including whether
operating, strategic, financial and structural alternatives could
unlock value, and statements regarding expected benefits from
strategic partnerships, alliances and initiatives, are
forward-looking statements. Forward-looking statements are
subject to significant risks and uncertainties and actual
developments, business decisions and results may differ materially
from those reflected or described in the forward-looking
statements. The following factors, among others, could cause
actual results to differ from those reflected or described in the
forward-looking statements: the uncertain impact, effects and
results of the board’s review of operating, strategic, financial
and structural alternatives and the planned redemption of the $350
million in unsecured notes; volatility in capital and credit
markets, including changes that reduce availability, and increase
costs, of capital and credit; our inability to obtain sufficient
quantities of product to meet consumer demand; the timing of
release and consumer demand for new and pre-owned products; our
ability to continue to expand, and successfully open and operate
new stores for our collectibles business; risks associated with
achievement of anticipated financial and operating results from
acquisitions; our ability to sustain and grow our console digital
video game sales; the impact of goodwill and intangible asset
impairments; cost reduction initiatives, including store closing
costs; risks related to changes in, and our continued retention of,
executive officers and other key personnel; changes in consumer
preferences and economic conditions; increased operating costs,
including wages; cyber security events and related costs; risks
associated with international operations; increased competition and
changing technology in the video game industry; changes in domestic
or foreign laws and regulations that reduce consumer demand for, or
increase prices of, our products or otherwise adversely affect our
business; our effective tax rate and the factors affecting our
effective tax rate, including changes in international, federal or
state tax, trade and other laws and regulations; the costs and
outcomes of legal proceedings and tax audits; our use of proceeds
from the sale of our Spring Mobile business; and unexpected changes
in the assumptions underlying our outlook for fiscal 2018 and
fiscal 2019. Additional factors that could cause our results to
differ materially from those reflected or described in the
forward-looking statements can be found in GameStop's Annual Report
on Form 10-K for the fiscal year ended February 3, 2018 filed with
the SEC and available at the SEC's Internet site at
http://www.sec.gov or http://investor.GameStop.com.
Forward-looking statements contained in this press release speak
only as of the date of this release. The Company undertakes no
obligation to publicly update any forward-looking statement,
whether as a result of new information, future developments or
otherwise, except as may be required by any applicable securities
laws.
Additional Information and Where to Find ItThis
filing may be deemed to be solicitation material in respect of the
matters to be considered at the Company’s 2019 annual meeting of
shareholders (the “2019 Annual Meeting”). In connection with the
2019 Annual Meeting, the Company plans to file with the Securities
and Exchange Commission (“SEC”) and furnish to the Company’s
shareholders one or more proxy statements and other relevant
documents. BEFORE MAKING ANY VOTING DECISION, THE COMPANY’S
SHAREHOLDERS ARE URGED TO READ THE PROXY STATEMENT(S) IN THEIR
ENTIRETY WHEN THEY BECOME AVAILABLE AND ANY OTHER DOCUMENTS TO BE
FILED WITH THE SEC IN CONNECTION WITH THE COMPANY’S 2019 ANNUAL
MEETING OR INCORPORATED BY REFERENCE IN THE PROXY STATEMENTS
BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE COMPANY’S
2019 ANNUAL MEETING AND THE PARTIES RELATED THERETO. The Company’s
shareholders will be able to obtain a free copy of documents filed
with the SEC at the SEC’s website at http://www.sec.gov or the
Company’s website at http://investor.GameStop.com.
Participants in the SolicitationThe directors,
executive officers and certain other members of management and
employees of the Company may be deemed “participants” in the
solicitation of proxies from shareholders in connection with the
matters to be considered at the Company’s 2019 Annual Meeting.
Information regarding the persons who may, under the rules of the
SEC, be considered participants in the solicitation of the
shareholders of the Company in connection with the Company’s 2019
Annual Meeting will be set forth in the applicable proxy statement
and other relevant documents to be filed with the SEC. You can find
information about the Company’s executive officers and directors in
the Company’s definitive proxy statement in connection with the
Company’s 2019 Annual Meeting when filed with the SEC on Schedule
14A and the Company’s and such persons’ other filings with the
SEC.
Investor Contact
GameStop Corp. Investor Relations
(817) 424-2001
investorrelations@gamestop.com
Innisfree M&A Incorporated
Art Crozier / Larry Miller
(212) 750-5833
Media Contact
Matthew Sherman / Aura Reinhard
Joele Frank, Wilkinson Brimmer Katcher
(212) 355-4449
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