Hastings Agrees to $21.4M Merger With Investor17 Mar, 2014 By: Erik Gruenwedel
Southwest packaged-media retailer going private after selling to company that manages Elvis Presely’s Graceland home in Memphis, Tenn.
Hastings Entertainment March 17 said it plans to merge with an investor, transferring the Southwest packaged-media retailer into a privately-owned company.
Under the deal, Amarillo, Texas-based Hastings will become a subsidiary of Draw Another Circle LLC, which is owned by Joel Weinshanker, who owns 12% of Hastings’ common stock. Weinshanker is the sole shareholder of National Entertainment Collectibles Association Inc., a licensee and supplier of movie, book and video game merchandise and collectibles to the Hastings superstores.
NECA manages Graceland, Elvis Presely’s famed home and theme park.
Upon completion of the merger, Hastings’ shareholders will receive $3 per share in cash, which is about 57% above Hastings' closing share price on March 14, and more than 61% over the average trading price of Hastings' common shares for the last 30 trading days. The transaction is valued at approximately $21.4 million.
“We've had a close and growing business relationship with Weinshanker over the last decade. Through his affiliation with the estates of Marilyn Monroe, Elvis Presley and Muhammad Ali, and his company's management of Graceland, [NECA] 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," John Marmaduke, Hastings' chairman and CEO, said in a statement.
It wasn’t immediately clear what position — if any — Marmaduke will hold after the merger.
A slight uptick in sales of Blu-ray Disc and DVD box sets contributed to Hastings narrowing losses to $6.2 million in its most recent fiscal quarter (ended Oct. 31). Revenue declined 6.6% to $94.6 million. The net loss through the first nine months increased 19% to $12.5 million, while revenue dropped 6% to $260 million. Hastings ended the period operating 127 retail stores.