(Updated, 12:15 p.m.)
PAWTUCKET – Hasbro Inc., the world’s second-biggest toymaker, denied that it’s in discussions regarding a possible takeover, saying the board spurned an approach from a private equity firm.
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There are currently no talks about the sale of the company, Hasbro said Thursday in a statement, without identifying the buyout firm. Providence Equity Partners Inc. was in discussions with Hasbro as recently as last week before they ended, according to a person familiar with the matter.
Hasbro, the maker of Nerf toys and Monopoly, was valued at about $6 billion as of Wednesday, which would have made a deal the largest leveraged buyout this year. Even the possibility of a buyout signals that toymakers are trading for less than they’re worth, said Chris White, an analyst with Wedbush Securities Inc. in Los Angeles.
“These alleged discussions surrounding Hasbro may be the catalysts to richer industry valuations,” White said Thursday in a report.
The Wall Street Journal reported earlier that Hasbro was in talks with Providence. Wayne Charness, a spokesman for Hasbro, declined to comment beyond the statement, while Providence spokeswoman Julie Fisher didn’t return a phone call seeking comment.
Hasbro, which closed at $41.12 Wednesday, climbed as high as $46.60 this morning before early trading was stopped prior to the announcement. After trading resumed, the shares advanced 88 cents, or 2.1 percent, to $42 at 11:51 a.m. on the New York Stock Exchange.
Stock Performance
Before today, Hasbro’s shares had climbed 28 percent this year, more than twice the pace of larger rival Mattel Inc. Hasbro, which also owns the Transformers and Scrabble brands, posted an almost threefold increase in net income last quarter after selling more games and puzzles.
Other U.S. toymakers are seeking additional investment. Toys “R” Us Inc. said last month that it plans to raise as much as $800 million in an initial public offering after KKR & Co., Bain Capital Partners LLC and Vornado Realty Trust took the company private in 2005 for $7.5 billion.
Hasbro had been trading at about 12.5 times its price-to-earnings ratio and 7 times its enterprise value to earnings before interest, taxes, depreciation and amortization, Wedbush’s White said, using his 2011 earnings estimates.
