Published , by Donovan Erskine
Published , by Donovan Erskine
Hasbro is a major entertainment brand that hosts some quite popular intellectual properties. However, an activist investor is looking to make some changes to the company, which could include moving one of these properties. Alta Fox Capital Management has expressed a desire for Hasbro to add to its board and potentially spin off Wizards of the Coast, the creators of Dungeons & Dragons and Magic: The Gathering.
The plans of Alta Fox Capital Management were first reported by the Wall Street Journal. In a letter to shareholders, the activist investor reportedly expressed its desire for Hasbro to make some changes to its board, nominating five candidates to replace members of Hasbro's board. What’s more, the group also encourages Hasbro to reevaluate its brand strategy and shift its business focus. As a part of this initiative, Alta Fox Capital Management proposes that Hasbro spins off Wizards of the Coast.
Wizards of the Coast is the company behind Dungeons & Dragons and Magic: The Gathering, as well as their very lucrative products, merchandise, and games. While on the surface this may seem like a questionable idea, Alta Fox believes that spinning off Wizards of the Coast will increase the company’s stock value by $100. Hasbro’s (HAS) stock closed yesterday in the neighborhood of $97/share.
Alta Fox Capital Management owns a 2.5 percent stake in Hasbro, which is worth $325 million. In a statement to CNBC, Hasbro said that it “engages in regular communication with its shareholders as part of its robust shareholder engagement program and welcomes constructive input.”
Alta Fox Capital Management’s belief that Hasbro could double its share value by spinning off Wizards of the Coast seems quite ambitious, so it will be interesting to see if it sparks any change at the entertainment company. For the most interesting financial stories in the entertainment world, stick with Shacknews.