PAWTUCKET – Nine days after reelecting all of its 13 directors to its board and winning a proxy battle with an activist investor, Hasbro Inc. announced it will hold an investor day with CEO Chris Cocks on Oct. 4.
The Rhode Island-based toy company announced its plans in a letter to its investors on Thursday, while at the same time showing its support for Cocks and its board of directors.
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“While we are excited about and confident in Hasbro’s future, we also know we have important work ahead of us. With the board’s support, our CEO, Chris Cocks, is moving forward with the refinement of Hasbro’s long-term strategy, which includes actions to drive meaningful change by focusing on fewer, bigger opportunities, profitably growing our world-class portfolio of brands and amplifying our industry-leading gaming portfolio,” the letter stated. “As the board works with Chris on this plan, we will actively incorporate the feedback we have received over this past proxy season to help him shape the future of Hasbro and enhance the value we deliver to our shareholders.”
On June 8, Hasbro shareholders reelected all of the company’s 13 directors to its board, rejecting a slate of three nominees from activist investor Alta Fox Capital Management, which had waged a contentious monthslong proxy battle for more influence over the company.
The 13 existing directors – Richard Stoddart, Kenneth Bronfin, Michael Burns, Hope Cochran, Lisa Gersh, Elizabeth Hamren, Blake Jorgensen, Tracy Leinbach, Edward Philip, Laurel Richie, Mary Beth West, Linda Zecher Higgins and Cocks – were reelected by a substantial margin.
In a letter to Hasbro shareholders before the vote, Alta Fox urged investors to unseat Stoddart, Hasbro board chairman, and board members Philip and Gersh, chairwoman of the compensation committee.
Alta Fox had nominated three people to replace Stoddart, Philip and Gersh. The nominees were Marcelo Fischer, chief financial officer at IDT Corp.; Rani Hublou, former chief marketing officer at 8×8 Inc.; and Carolyn Johnson, former chief transformation officer at American International Group Inc.
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 “ill-timed” and contended in a letter to its shareholders that Alta’s nominees lack “any relevant industry expertise.” The letter added that 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 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 on. Hasbro also said it offered to have 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 toymaker, also encouraged 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 said 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 Wizards 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.”
