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.