Shareholders Approve Hastings Entertainment Sale to Investor15 Jul, 2014 By: Erik Gruenwedel
Deal marks southwest entertainment retailer’s return to privately held business since 1998
Hastings Entertainment Corp. July 15 announced it has completed its $21.4 million sale to Draw Another Circle LLC, which is owned by Joel Weinshanker, who owns 12% of the Amarillo, Texas-based retailer’s common stock.
The transaction, which still faces two federal lawsuits alleging the purchase price is too low, was approved during a special board meeting closed to the media. Shareholders of record receive $3 per share in cash. Hastings’ stock closed at $2.97 per share July 14.
As a result of the merger, Hastings, which operates about 126 stores, becomes a wholly owned private subsidiary of Draw Another Circle and is delisted from the stock exchange. Weinshanker is the new CEO and CFO of Hastings.
“It’s an honor and a privilege to be able to be part of the next chapter of such an important American retailer as Hastings,” Weinshanker said in a statement. “We will continue to run the business with the same ethical standards and values that the Marmadukes founded and built the chain on.”
Weinshanker’s businesses control licensing and merchandise rights for Marilyn Monroe, Muhammad Ali and Elvis Presley, including operating Graceland, which reportedly attracts 500,000 visitors annually.
Meanwhile, CEO John Marmaduke, whose father Sam founded Hastings in 1968, and CFO Dan Crow retired their positions as board members. Under the separation agreements, Marmaduke and Crow will receive lump-sum severance payments of $1.5 million and $750,000, respectively.
Alan Van Ongevalle, current president and COO, and Philip McConnell, VP and merchandise manager, retained their positions.
Finally, Jeffery Shrader, Ann Lieff, Danny Gurr and Frank Marrs voluntarily resigned from the board, with Weinshanker the sole director of Hastings.
Hastings reported fourth-quarter (ended Jan. 31) net income of $2.3 million, up 91% from net income of $1.2 million during the previous-year period. Revenue declined $5.2 million to $136.4 million due in part to operating 10 fewer stores than a year ago.