rumored leveraged buyout of Hasbro

[Vyvyan Basterd]

Easy strategy of Hasbro attempting to raise the bid price.

Or better yet, start a bidding war between several buyout firms.

Possible, but like the article says the higher price makes an LBO less likely. Obviously its not completely out of the question. I mean, experts are never wrong, are they?

 

[The Ghost]

I wonder what they will do? Will this mean a change in how Hasbro manages things?

The hope would be that, without having to having to focus on satisfying the quarterly expectations of fund managers and analysts, management can focus on producing long-term value.

Will the strip mine the brands/assets?

I doubt that Hasbro is worth more broken up than it is as a whole. There is not a large market* for their assets. However, that does not mean that they would not sell off parts of the company to help pay down the short-term debt - I just don't expect it.

* Hasbro and Mattel combined represent roughly half of the toy industry's market cap and about a quarter of the industry's revenues. Most of the other competitors are relatively small (JAKKS Pacific) or have a narrow product line (LEGO, LeapFrog, Ty, etc.).

 

[Dedekind]

Reads to me like it won't happen, though I would be interested to know what stock price they were offering. Wells Fargo was estimating 48-52 which would be around a 10% premium. Not bad, but with Hasbro's recent meteoric rise in sales, growing dividend, and 2% dividend yield, I suspect it would take a bigger price to seduce the board.

Also, if private equity gets involved, interesting things could happen. When they bought Warner Music Group, there was an acquisition binge...

 

[Derulbaskul]

(snip) Also, if private equity gets involved, interesting things could happen. When they bought Warner Music Group, there was an acquisition binge...

Actually, as a D&D fan I would love to see a Private Equity firm buy Hasbro. The D&D brand needs to be revitalised with, for example, a Transformers-like movie. A PE firm might more aggressively explore such an opportunity and, if they failed to deliver, might be more likely to offload the D&D RPG to a smaller firm. (I strongly believe that the D&D RPG is better suited to a smaller, privately-owned organisation.)

 

[Umbran]

A PE firm might more aggressively explore such an opportunity and, if they failed to deliver, might be more likely to offload the D&D RPG to a smaller firm.

I wouldn't expect "private" to necessarily be more aggressive. The psychology of the leadership is not so directly linked to the type of ownership.

 

[ggroy]

It would depend on what the leveraged buyout (LBO) firm's intentions are.

If it's an LBO firm that is more interested in breaking up huge companies and selling off the individual divisions as separate companies, then it wouldn't be too surprising to see them selling off the D&D division as an entity independent of WotC.

It's a completely different story if the LBO firm is actually interested in running such a large company. For such a case, there will most likely be a lot of cost cutting and other things to reduce the already huge debt load from the leveraged buyout itself.

 

[nedjer]

It would depend on what the leveraged buyout (LBO) firm's intentions are.

If it's an LBO firm that is more interested in breaking up huge companies and selling off the individual divisions as separate companies, then it wouldn't be too surprising to see them selling off the D&D division as an entity independent of WotC.

It's a completely different story if the LBO firm is actually interested in running such a large company. For such a case, there will most likely be a lot of cost cutting and other things to reduce the already huge debt load from the leveraged buyout itself.

What are you telling me here? Is this the last, best hope for Here Come The Ponies?

 

[ggroy]

Is this the last, best hope for Here Come The Ponies?

Or a Beavis and Butthead version of D&D.

 

[Silverblade The Ench]

Actually, as a D&D fan I would love to see a Private Equity firm buy Hasbro. The D&D brand needs to be revitalised with, for example, a Transformers-like movie. A PE firm might more aggressively explore such an opportunity and, if they failed to deliver, might be more likely to offload the D&D RPG to a smaller firm. (I strongly believe that the D&D RPG is better suited to a smaller, privately-owned organisation.)

Agreed!
long as it's not led by another Lorraine Williams....

Rumours of Lorraine Williams being thrown into a blue box at TSR HQ, then arriving in Ed Greenwood's Dungeon of Drow Delights for an indefinite stay, have no basis in fact, said the Lone Gunmen, when asked for comment

 

[Amphimir Míriel]

If this happens, it would be bad news...

There is the chance of a buyout by a private equity firm bringing better management of core assets, leading to better products and soaring sales...

However, in most cases, these buyouts only produce profits for the private equity firm and, after they are done sucking all the value of the purchased company, they drop its dessicated corpse by the side of the road.

Read this if you don't believe me:
http://www.nytimes.com/2009/10/05/business/economy/05simmons.html?_r=1