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Hasbro dispute with activist investor Alta Fox likely to lead to shareholder vote

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Yahoo Finance's Brian Sozzi breaks down the state of Hasbro's dispute with activist investor Alta Fox.

Video Transcript


JULIE HYMAN: Well, remember Hasbro had been approached by an activist investor Alta Fox. And Mr. Sozzi there has a scoop on the response that Alta Fox got from the company. So what did they say or not say, I guess, as the case may be?

BRIAN SOZZI: Yeah, I have the full story on this one, Julie, now on the Yahoo Finance home page. I won't go too far down the rabbit hole. I will suggest everyone just go read that story. But look, Hasbro's stock is now near a 52-week low. And this activist battle is in fact heating up.

I caught up with Alta Fox founder Connor Haley. It's his firm that has launched this activist attack against Hasbro. He's a 2 and 1/2 percent holder in Hasbro. Telling me, quote, "We've got a world class slate of advisors. And they are all collectively stunned at the level of entrenchment of the current Hasbro board. I think we went well out of our way to offer a beyond reasonable settlement."

So essentially, Hasbro has rebuffed Haley, who came to the company with some form of settlement. Now, Haley says he did, in fact, seek a compromise with Hasbro to add one of his nominees to Hasbro's board along with the establishment of a capital allocation committee. The company did not agree.

And then he told me that the company signaled they might add two new directors from the gaming industry sometime this week. So that will be something to watch moving forward. Now, this is an attack or a campaign that began in February. Haley nominated five members to Hasbro's board and encouraged them to spin off the digital Wizards of the Coast business. If they did that, Haley suggests that Hasbro could be worth $200 a share.

Now, of course, I did get a statement from Hasbro on this. Hasbro saying they are committed to engaging with all shareholders in a constructive and thoughtful manner. They did note that they will have a preliminary proxy statement containing its position on these matters out soon.

But again, Julie, this is a situation not going to end any time soon. Likely to continue on for the foreseeable future until some form of agreement comes to pass. Haley is not going away. And clearly, Hasbro is not willing to budge here.

JULIE HYMAN: Brian, I would love to know what the numbers are on current activist campaigns against companies, because it feels, maybe just because we follow them closely, like there may have been an uptick here in these kinds of campaigns. But maybe it's just that they're visible when they happen. So it always feels like that there are a lot going on.

BRIAN SOZZI: No. Well, these are-- of course, the main one we have been covering, of course, is the Kohl's. That also is one that is coming to a head very, very soon ahead of the company's annual meeting in May. But still, to your point, I mean, you have the next crop of activist investors really taking it to some very affordable companies. Jonathan Duskin taking the fight to a struggling Kohl's. And then you have here, Alta Fox, really, this is their biggest campaign yet for Alta Fox and Connor Haley, taking to a storied toymaker, a storied company like a Hasbro.