PAWTUCKET – Hasbro Inc. is telling its shareholders that an activist investor “lacks an understanding” of the company and its slate of candidates for Hasbro’s board of directors should be rejected in a June 8 proxy vote.
In a letter to shareholders issued Monday, Hasbro called the proxy campaign by Alta Fox Capital Management “ill-timed” and contended that Alta’s five nominees to the 13-member board lacked “any relevant industry expertise.”
Alta Fox, which owns about 2.5% of Hasbro’s shares, has demanded that the toy 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.
“Alta Fox’s agenda will not create value for shareholders and its nominees offer no beneficial experience to Hasbro’s board or the company,” Hasbro said in a letter to shareholders.
On March 27, Hasbro turned down a settlement offer from Alta Fox to have only one of its nominees added to the Hasbro board. In March, Hasbro nominated five directors to its 13-member board, which is scheduled to shrink to 12 members next year and 11 members by 2024.
The shareholder letter voiced support for new Hasbro CEO Chris Cocks and the diverse lineup of its board. The letter also states this Wizards’ division business doubled from 2018 to 2021. Cook has been CEO for eight weeks.
“We firmly believe it is in your best interests, as a shareholder, to give him an opportunity to execute his game plan and drive the performance of Hasbro as a whole,” the letter said. “Hasbro’s diverse and experienced Board, recently enhanced with the additions of Liz Hamren and Blake Jorgensen, is best positioned to support Chris, the management team and employees of Hasbro to drive value creation for the benefit of all our shareholders.”
The company argued, with $1 billion invested in Wizards over the past five years, a spinoff “would not create value for shareholders.”
“There is no doubt that Chris will apply the growth orientation and capital discipline that he successfully demonstrated during his time at Wizards to the rest of the Hasbro business along with his focus on games, multi-generational play and entertainment and direct to consumer,” the letter said. “Chris is in the early days of refining the fundamental game plan he used at Wizards to pursue long-term growth opportunities across the full company, and we believe the actions and agenda of Alta Fox will only impair that progress to the detriment of all shareholders.”
The Wizards of the Coast division oversees “Magic: The Gathering” and other digital and tabletop franchises. Most recently, D&D Beyond was added to that division after Hasbro purchased the digital toolset for the toy company’s Dungeons & Dragons role-playing game, from Fandom Inc. for $146.3 million.
