Harte Hanks Inc (HHS)

Westerly Capital Management LLC has fully divested its 635,000 shares in Harte-Hanks Inc (HHS) at $3.78 per share, citing the customer experience company's weak fundamentals and poor future performance potential. Despite a recent 29.35% year-to-date gain, Harte-Hanks' GF Score of 54/100 and a GF Value Rank of 10/10 suggest it is fairly valued with limited upside, aligning with Westerly Capital's focus on high-growth technology and industrials. This exit is viewed as a prudent risk-management decision, freeing capital for more promising opportunities.

Bradley L. Radoff, a significant stockholder of Harte Hanks (HHS), has pledged his votes in favor of the proposed merger with Star Equity Holdings, Inc. The merger will allow Harte Hanks shareholders to receive $5.00 cash per share or 0.50 shares of Star's 10% Series A Cumulative Perpetual Preferred Stock, or a combination thereof. Radoff beneficially owns 5.7% of Harte Hanks' outstanding shares and has entered into a Voting and Support Agreement to back the transaction.

Star Equity (STRR) is acquiring Harte-Hanks (HHS) for $5.00 per share, with payment split equally between cash and 10% cumulative preferred stock (STRRP). The author highlights the significant risk involved, with a potential downside of $2.00 per share against a possible gain of $1.35, despite unanimous board support and signed agreements. The deal utilizes preferred stock due to Star Equity's $215 million in federal NOLs, which would be jeopardized by a massive common equity ownership change.

Westerly Capital Management, LLC, along with Christopher J. Galvin and Westerly Holdings LLC, has filed an Amendment No. 9 to Schedule 13G, reporting that they no longer hold a significant stake in Harte Hanks (HHS). The filing indicates their beneficial ownership is now 0 shares, representing 0.0% of the common stock, with no voting or dispositive power. This update signals a complete divestment of their previous stake in the company.

Harte Hanks has entered a definitive merger agreement to be acquired by Star Equity. Shareholders can elect to receive $5.00 per share in cash, 0.50 share of Star Equity's 10% Series A Cumulative Perpetual Preferred Stock, or a mix, subject to a $19.2 million cash cap and proration. The closing of the deal is contingent on Harte Hanks stockholder approval, SEC effectiveness, and debt financing, with directors and officers signing voting agreements to support the merger.