Hestia Capital and Permit Capital Send Letter to GameStop (GME) Board of Directors Calling for a Refreshed Board and Stock Tender Offer of up to $700 Million
GameStop's current Board has overseen significant value destruction; long term stockholders believe GameStop needs new independent directors to focus on optimizing the business, returning capital to shareholders, rebuilding Company leadership, and moving forward from a failed sales process.
PITTSBURGH, March 14, 2019 /PRNewswire/ -- Hestia Capital Partners LP and Permit Capital Enterprise Fund, L.P., who collectively own, together with their affiliates, approximately 1.3% of the outstanding common stock of GameStop Corp. (NYSE: GME) (the "Company"), sent a letter yesterday to the Company's Board of Directors (the "Board") expressing their shared concerns regarding the dramatic underperformance of the Company's stock. In the letter, the long-term stockholders - who are not typically activist investors - called on the Board to engage with them to address the Company's ongoing value destruction by bringing in new and independent Board members and tendering for up to $700 million of the Company's common stock. The full text of the letter can be seen by clicking on the link below:
About Hestia Capital
Hestia Capital is a long-term focused, deep value fund that leverages the General Partner's expertise in competitive strategy to identify and invest in companies which it believes are undervalued due to transitory company and/or industry disruptions, which are misunderstood by the investment community.
About Permit Capital Enterprise Fund
The Permit Capital Enterprise Fund, through its management company, follows an investing philosophy that seeks to identify securities trading at a discount to intrinsic value. The investment approach is bottom-up and focused on the valuation of the securities of individual issuers. The management company's assessment of intrinsic value is based on its own fundamental research as well as numerous sources of publicly available information.
CERTAIN INFORMATION CONCERNING THE PARTICIPANTS
Hestia Capital Partners LP ("Hestia LP"), together with the other participants named herein (collectively, the "Stockholder Group"), intends to file a preliminary proxy statement and an accompanying proxy card with the Securities and Exchange Commission ("SEC") to be used to solicit votes for the election of its slate of highly-qualified director nominees at the 2019 annual meeting of stockholders of GameStop Corp., a Delaware corporation (the "Company").
THE STOCKHOLDER GROUP STRONGLY ADVISES ALL STOCKHOLDERS OF THE COMPANY TO READ THE PROXY STATEMENT AND OTHER PROXY MATERIALS, INCLUDING A PROXY CARD, AS THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. SUCH PROXY MATERIALS WILL BE AVAILABLE AT NO CHARGE ON THE SEC'S WEB SITE AT HTTP://WWW.SEC.GOV. IN ADDITION, THE PARTICIPANTS IN THIS PROXY SOLICITATION WILL PROVIDE COPIES OF THE PROXY STATEMENT WITHOUT CHARGE, WHEN AVAILABLE, UPON REQUEST. REQUESTS FOR COPIES SHOULD BE DIRECTED TO THE PARTICIPANTS' PROXY SOLICITOR.
The "Participants" in the proxy solicitation are anticipated to be Hestia LP, Hestia Capital Management, LLC ("Hestia LLC"), Kurtis J. Wolf, Permit Capital Enterprise Fund, L.P. ("Permit Enterprise"), Permit Capital, LLC ("Permit LLC"), Permit Capital GP, Inc. (Permit Inc), Permit Capital GP, L.P. ("Permit GP"), and John C. Broderick.
As of the date hereof, Hestia LP beneficially owns directly 160,000 shares of Class A common stock, par value $0.001 per share (the "Common Stock"), of the Company. Hestia LLC, as the general partner of Hestia LP, may be deemed to beneficially own the 160,000 shares of Common Stock of the Company directly owned by Hestia LP and an additional 40,000 shares of Common Stock of the Company held in a separately managed account. Mr. Wolf, as the Managing Member of Hestia LLC, may be deemed to beneficially own the 160,000 shares of Common Stock of the Company directly owned by Hestia LP and an additional 40,000 shares of Common Stock of the Company held in a separately managed account. In addition, Mr. Wolf is deemed to beneficially own 6,900 shares of Common Stock that are beneficially owned directly by Mr. Wolf, his wife and various trusts for the benefit of his children.
As of the date hereof, Permit Enterprise beneficially owns directly 1,000,000 shares of Common Stock. Permit Inc, as the general partner of Permit GP, as the general partner of Permit Enterprise, may be deemed to beneficially own the 1,000,000 shares of Common Stock of the Company directly owned by Permit Enterprise. Permit LLC, as the investment manager of Permit Enterprise, may be deemed to beneficially own the 1,000,000 shares of Common Stock of the Company directly owned by Permit Enterprise. John C. Broderick, as an Officer of Permit Inc and Partner of Permit LLC with sole voting and dispositive power over such shares, may be deemed to beneficially own the 1,000,000 shares of Common Stock of the Company directly owned by Permit Enterprise. In addition, Mr. Broderick beneficially owns directly 104,100 shares of Common Stock of the Company and may be deemed to beneficially own an additional 3,825 shares of common stock of the Company that are beneficially owned directly by his wife.
Contacts:
Kurt Wolf at 724-687-7842
John Broderick at 610-941-5025
SOURCE Hestia Capital Management, LLC
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