Hastings Entertainment’s merger with a company affiliated with one of its largest shareholders has hit a snag as a judge has issued a temporary restraining order. The TRO, made by the U. S. District Court for the Northern District of Texas, was issued in response to a lawsuit filed shortly after the deal was announced March 17 that charges that the purchase price of $3.00 per share is too low. The lawsuit seeks to enjoin the merger or rescind the merger if it is consummated and compensatory damages in an unspecified amount.
Under the terms of the TRO, Hastings is restricted, among other things, from completing the merger prior to June 12, on which date a hearing has been scheduled to address issues in the suit which include a motion for expedited discovery in the case and a restraining order to prevent the deal from closing.
Hastings said it believes that the lawsuit was improperly and prematurely filed under Texas law and that the claims alleged “are factually incorrect and deficient as a matter of law.” The company added it “intends to vigorously dispute these claims at the June 12 hearing with respect to the Order and throughout the life of this litigation.”