Hasbro Pressure Mounts With Another Activist Critic
(Bloomberg) -- Hasbro Inc.'s shareholder resistance is growing.
In February, an activist investor called on the company to spin off its popular Wizards of the Coast division. Now, a separate shareholder, Ancora Holdings Group LLC, is also pushing for Hasbro to sell its film and TV studio, Entertainment One.
Ancora, which owns approximately 1% of the toy company's shares, said in a statement Tuesday it supports three directors nominated by Alta Fox Capital Management to create a “properly refreshed board.” Ancora also criticized Hasbro's 2019 acquisition of Entertainment One and said the company should cut its losses by selling all or part of the business. Hasbro could partner with outside firms to develop intellectual property, instead of producing its own content, Ancora said.
Ancora also echoed Alta Fox's call for Hasbro to consider spinning off its Wizards unit, which includes popular games such as Magic: The Gathering and the role-playing game Dungeons & Dragons. Both investors argue that the company has not fully capitalized on the Wizards brand, which has been a key driver of revenue growth.
“A pair of activist pushes cranks the intensity level up a notch” for Hasbro ahead of its June 8 shareholder meeting, Jefferies analyst Stephanie Wissink wrote in a note to clients. “Pressure to perform & prove the model can sometimes result in more targeted moves that stretch a business further, faster.”
Conor Sweeney, a representative for Ancora, said the firm has no plans to sell its shares in Hasbro and remains confident in the company's growth potential. Ancora sent a letter to the board on Monday, which was originally reported by the Wall Street Journal. Sweeney said the firm hadn't heard back from Hasbro as of Tuesday morning.
Hasbro did not immediately respond to requests for comment. Alta Fox declined to comment.
The investors' calls come as Hasbro's stock performance has trailed that of rival toy manufacturer Mattel Inc. Through Monday's close, Hasbro had fallen 12% so far this year while Mattel had gained 15%.
©2022 Bloomberg L.P.
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