With Hasbro's stock (HAS) hovering at a 52-week low, the battle with its new activist investor Alta Fox Capital is heating up.
Alta Fox founder Connor Haley tells Yahoo Finance his firm — a 2.5% holder in Hasbro — has been rebuffed in its effort to reach a settlement.
“We've got a world class slate of advisers, 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," Haley told Yahoo Finance.
Haley says it sought a compromise of adding one of its nominees to Hasbro's board and the creation of a capital allocation committee. The company didn't agree, signaling to Haley it may add two new gaming executives to its board shortly in a defensive move.
"Hasbro is committed to engaging with all shareholders in a constructive and thoughtful manner. In keeping with that commitment, Hasbro’s Board of Directors and management team have had multiple conversations with Alta Fox to listen to its views and attempt to come to a resolution of this campaign in a manner that is in the best interests of all shareholders. Hasbro will shortly file its preliminary proxy statement containing the company’s position on these matters," a Hasbro spokesperson told Yahoo Finance via email.
Haley launched his activist campaign — the most high-profile one yet for Alta Fox — back in February. Haley contends Hasbro could be worth $200 a share if the company spins off its lucrative Wizards of the Coast business. The firm also put forth a slate of five new directors to Hasbro's board.
Hasbro has said it believes in its brand blueprint strategy put forth by former CEO Brian Goldner. It's a plan expected to be executed upon by new CEO Chris Cocks.
The activist added that he suggested to Hasbro that it spins off part of Wizards of the Coast while retaining a stake, which could help it potentially maximize value of the asset and attract key talent.
With talks at a standstill, Haley says he wouldn't be surprised if there is a hostile bid for Hasbro.
"It would not surprise me at all if somebody came around and said look, we're gonna bid for the whole company in a hostile way. It would not surprise me at all, and we've had a lot of inbound inquiries among investment firms that have a history of doing just that," Haley added.