AMARILLO, Texas, June 2, 2014 /PRNewswire/ -- Hastings
Entertainment, Inc. (NASDAQ: HAST), a leading multimedia
entertainment retailer ("Hastings"), today reported that the United
States District Court for the Northern District of Texas, Amarillo Division, has issued an Order
Granting Motion for Temporary Restraining Order and Setting Hearing
on Request for a Preliminary Injunction (the "Order") restricting
the potential merger transaction involving Hastings and an
affiliate of Mr. Joel
Weinshanker. As Hastings first disclosed on
March 17, 2014, Hastings entered into
an Agreement and Plan of Merger (the "Merger Agreement") on such
date with Draw Another Circle, LLC ("Parent") and Hendrix
Acquisition Corp. ("Merger Sub"), which are each wholly-owned,
directly or indirectly, by Mr. 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.
On March 28, 2014, a lawsuit
challenging the merger, captioned CV-00072-J—Andreas Oberegger and David A. Capps, directly and derivatively on
behalf of Hastings Entertainment, Inc., v. Danny W. Gurr, Ann S.
Lieff, Frank O. Marrs,
John H. Marmaduke, Jeffrey G. Shrader, Draw Another Circle, LLC,
Hendrix Acquisition Corp., Joel
Weinshanker and National Entertainment Collectibles
Association, Inc., as defendants, and Hastings Entertainment, Inc.,
as a nominal defendant, was filed in the United States District
Court for the Northern District of Texas, Amarillo Division. The plaintiffs are
purported shareholders of Hastings and are alleging, among other
things, that the merger contemplated in the Merger Agreement
provides for insufficient consideration to be paid to Hastings'
shareholders in exchange for their shares of Hastings' common
stock, that the officers and directors of Hastings breached their
respective fiduciary duties in the course of negotiating and
approving the Merger Agreement and that the other defendants aided
and abetted such breach of fiduciary duties. The lawsuit
seeks to enjoin the merger or rescind the merger if it is
consummated and compensatory damages in an unspecified
amount.
On May 28, 2014, the plaintiffs
filed a motion for expedited discovery and a motion for entry of a
temporary restraining order to enjoin the proposed transaction from
closing. On May 30, 2014, two
days after the plaintiffs filed this motion, the Court issued the
Order in response to this motion. Under the terms of the
Order, Hastings is restricted, among other things, from
consummating the merger prior to June 12,
2014, on which date a hearing has been scheduled with
respect to the Order.
Hastings believes that the lawsuit was improperly and
prematurely filed under Texas law
and that the claims alleged therein are factually incorrect and
deficient as a matter of law. Hastings also believes that the
grounds upon which the plaintiffs sought the Order are insufficient
as a matter of fact and law. Hastings intends to vigorously
dispute these claims at the June 12
hearing with respect to the Order and throughout the life of this
litigation.
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.