Another investor pushes Hasbro to settle with Alta Fox

Updated 1:15 p.m.

BOSTON PARTNERS, which owns a 2.26% stake in Hasbro, told the news service it's backing Alta Fox’s three candidates for Hasbro’s board of directors, adding a settlement would benefit both Hasbro an its shareholders. / PBN FILE PHOTO

PAWTUCKET – Another Hasbro Inc. investor is pushing the toy company to settle its proxy battle with activist investor Alta Fox, Reuters reported Wednesday.

Boston Partners, which owns a 2.26% stake in Hasbro, told the news service it’s backing Alta Fox’s three candidates for Hasbro’s board of directors, adding a settlement would benefit both Hasbro and its shareholders.

“At this point, we are recommending to our Governance Committee to vote in favor of the Alta Fox nominees,” said William Butterly, Boston Partners’ general counsel and director of sustainability and engagement. “A greater refresh of the board is necessary to drive positive change at the company level.”

In a letter to Hasbro shareholders, Alta Fox urged investors to vote against Hasbro board Chairman Rich Stoddart and board members Lisa Gersh, chairwoman of the compensation committee, and Edward Philip.

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Alta Fox has nominated three people to replace Stoddart, Philip and Gersh: Marcelo Fischer, chief financial officer of IDT Corp., Rani Hublou, former chief marketing officer at 8×8 Inc., and Carolyn Johnson, former chief transformation officer at American International Group Inc.

“We felt absolutely compelled to proceed with a campaign to elect highly qualified individuals with fresh perspectives and open minds,” Haley wrote to Hasbro’s shareholders. “We believe Hasbro suffers from an arrogant, insular and ineffective board culture under Rich Stoddart and other long-tenured directors.”

Alta Fox, which owns about 2.5% of Hasbro’s shares, has demanded that the company spin off its Wizards of the Coast division into a separate company, but Alta Fox has been rebuffed by Hasbro executives and the board of directors.

Hasbro called the proxy campaign by Alta Fox Capital Management “ill-timed” and contended in a letter to its shareholders that Alta’s nominees lack “any relevant industry expertise.” The letter added the activist investor “lacks an understanding” of the company and that its slate of candidates for Hasbro’s board of directors should be rejected in a June 8 proxy vote.

In March, representatives for Hasbro and Alta Fox attempted to negotiate a settlement over representation on the board of directors.

Hasbro said in a U.S. Securities and Exchange Commission filing that it proposed adding a director that both Alta Fox and the company could agree upon. Hasbro also said it offered to have CEO Chris Cocks meet with Alta Fox at “regular intervals” and provide “enhanced” financial disclosures on Wizards of the Coast.

In turn, Alta Fox offered a settlement in which it would have only one of its nominees added to the Hasbro board.

Both sides could not reach an agreement.

In April, Hasbro added two members to expand its board to 13, which is scheduled to shrink to 12 members next year and 11 members by 2024.

Ancora Holdings, which has a 1% stake in the toy maker, is also encouraging the replacement of some unnamed, “long-tenured incumbents” on Hasbro’s board of directors and the partial sale of Entertainment One in its May 3 letter to Hasbro shareholders.

The investor claimed Hasbro should “cut its losses” and execute a transaction that could reap $2 billion and tax benefits. It also urged Hasbro to spin off the Wizard’s of the Coast division, noting that its shares “are currently trading at a 75% discount to intrinsic value.”

Hasbro bought Entertainment One for about $4 billion in 2019 to expand into the infant and preschool market by gaining access to popular TV shows such as “Peppa Pig” and “PJ Masks.”

(Updates: Corrects Hasbro board of directors expanding to 13 members in April in ninth paragraph and adds detail about negotiations between Hasbro and Alta Fox.)

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