Star Equity Holdings Announces Merger to Acquire Harte Hanks

What Happened
Star Equity Holdings, Inc. (Star) filed an 8‑K on August 14, 2026 announcing it signed an Agreement and Plan of Merger to acquire Harte Hanks, Inc. (HH). Under the deal, Merger Sub – R, Inc. (a Star subsidiary) will merge into HH and HH will become a wholly owned subsidiary of Star. HH shareholders may elect $5.00 cash per share or 0.50 shares of Star’s 10% Series A Cumulative Perpetual Preferred Stock (par $0.001) per HH share; non‑electing shares may receive cash, preferred stock or a mix subject to allocation rules. Star will file a Form S‑4 (Proxy Statement/Prospectus) for the transaction and HH will hold a stockholder vote to approve the merger.

Key Details

• Cash consideration: $5.00 per HH share; Preferred consideration: 0.50 shares of 10% Series A preferred per HH share.
• Maximum cash payout across all shareholders: $19,200,000; cash in lieu of fractional preferred shares paid at $10.00 per fractional share.
• Financing: Star may draw on HH’s Texas Capital Bank credit facility (not to exceed $15 million) or obtain alternative debt financing to fund cash payments.
• Equity awards: vested HH options and vested RSUs convert into merger consideration per the agreement; outstanding performance stock units (PSUs) are cancelled without payment.
• Conditions & protections: closing requires HH stockholder approval, effectiveness of the Form S‑4, required third‑party consents and completion of the debt financing; termination fees and liability caps of $1,152,000 apply to each party (with limited exceptions). Support agreements from certain HH directors/officers commit their votes to approve the merger.

Why It Matters
This is a strategic acquisition that will make Harte Hanks a Star subsidiary and change HH shareholders’ holdings into cash and/or Star preferred stock. The capped aggregate cash pool ($19.2M) means many shareholders may receive preferred stock instead of cash if cash elections exceed the cap. The deal depends on a shareholder vote, SEC filings (Form S‑4), and completion of debt financing, any of which could affect timing and certainty of closing. Investors should watch the S‑4/proxy for more detail on the transaction mechanics, dilution to Star equity from issued preferred stock, and updates on financing and the HH shareholder vote.