Hasbro Rises on Report of Takeover Talks With Providence Equity Partners
June 24 (Bloomberg) -- Bloomberg's Deirdre Bolton reports on the latest breaking news and top stories in today's Business Briefs. (Source: Bloomberg)
Hasbro Inc. climbed as much as 12 percent in early trading after the Wall Street Journal reported that the toymaker is in discussions with Providence Equity Partners Inc. about a possible takeover.
Talks held over the past few weeks are in early stages and may not lead to a purchase, the newspaper said, citing people familiar with the matter. Hasbro, owner of the Nerf toy brand, has a market value of about $6 billion, which would make it the largest leveraged buyout of the year, the Journal said.
Before today, Hasbro’s shares had climbed 28 percent this year, more than twice the pace of larger rival Mattel Inc. Hasbro, which also owns the Monopoly brand, posted an almost threefold increase in net income last quarter after selling more games and puzzles.
If the talks were to succeed, Hasbro would join other U.S. toymakers in seeking additional investment. Toys “R” Us Inc. said last month that it plans to raise as much as $800 million in an initial public offering after KKR & Co., Bain Capital Partners LLC and Vornado Realty Trust took the company private in 2005 for $7.5 billion.
Hasbro climbed as high as $46 in early trading after closing at $41.12 yesterday on the New York Stock Exchange.
Providence, which recently sold Bresnan Communications Co. to Cablevision Systems Corp. for $1.37 billion, may need at least 40 percent equity contribution to buy a company the size of Hasbro, the Journal, said compared with recent contributions of about 30 percent. Talks are proceeding slowly due to uncertainty about current markets, the newspaper reported.
Wayne Charness, a spokesman for Pawtucket, Rhode Island- based Hasbro, wasn’t immediately available to comment.
To contact the reporter on this story: Clementine Fletcher in London cfletcher5@bloomberg.net; Duane Stanford in Atlanta at dstanford2@bloomberg.net
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