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December 2019, Hasbrogo home special forces, Transformers and dungeons and dragons Brands, Closed Deals Worth $3.8 Billion entertainment onea producer with a library of 6,500 titles and popular cartoons Peppa Pig and pajama mask.
The toymaker quickly regretted the move, and in May — when Hasbro was fending off a proxy battle from activist investor Alta Fox, which sought to have it spin off its gaming division — Calling the timing of the studio acquisition “unfortunate,” suggesting it was overspending.
Now, Hasbro is selling eOne and revealed on Nov. 17 that it had hired bankers to explore selling the studio, but keeping the IP intact Peppa PigIt’s a nod to investors who have urged the company to sell some of eOne to reinvest in fewer, more profitable assets, and to do so with outside partners to reduce costs and risks. Wall Street analysts applauded the move.
“Downsizing eOne makes sense because there are a lot of non-core assets in the business that don’t necessarily fit Hasbro Flywheel,” said MKM Partners’ Eric Handler. The analyst added that Hasbro will retain its home content business and, like rival Mattel, relies on production deals with Hollywood studios and steam engines as well as high-profile talent. “They just need to retain enough infrastructure and people to bootstrap Hasbro’s IP into a successful film or TV project,” Handler noted.
The idea of becoming a Hollywood producer like Marvel Studios was spearheaded by CEO Brian Goldner, who died in October 2021.His successor, Chris Cox, is more focused on building Hasbro into a gaming powerhouse, including its lucrative Magic: The Gathering and wizards of the coast franchise.
Instead of going through an expensive production process, Hasbro can simply leverage its IP catalog for Paramount’s projects, such as its 2023 release Transformers: Rise of Beasts and Dungeons and Dragons: Honor Among Rogues.
As Hasbro investor Fredrick DiSanto bluntly wrote in a letter to leadership in May: “Hasbro doesn’t need to own eOne to bring dungeons and dragons On the big screen, like George RR Martin doesn’t need his own production studio game of Thrones Life. ”
News of the sale process came as no surprise. The toy giant noted that the earlier sale of eOne’s music business for $385 million “was not central to our brand roadmap strategy”. The move to spin off eOne follows the division’s chief executive, Darren Throop, announcing in August that he would step down from the company when his contract expires in late 2022.
Now, most of the other content in eOne is also redundant for Hasbro to focus on fewer, bigger brands. “This is positive as it will allow Hasbro to deleverage more quickly and move away from non-core businesses whose performance is less predictable and which diverges operations from strategic parts of the business (toys, board games, and digital games) ,” DA Davidson analyst Linda Bolton Weiser wrote in a Nov. 17 note.
Hasbro said it had hired JPMorgan and Centerview Partners for the sale, just days after a Nov. 14 investor note from Bank of America said the toy giant was “destroying its long-term value.” Magic: The Gathering Its stock price fell sharply due to the sale of too many collectible cards.
As for the sale process, the company revealed in a filing that it “anticipates the process will take several months. During this time, Hasbro’s entertainment team will continue to operate under the eOne production logo.”
Shares of Hasbro recovered $2.45, or just over 4%, to $58.42 at Thursday’s close.
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