By Svea Herbst-Bayliss
BOSTON (Reuters) – Hasbro Inc on Monday added two directors to its board and said it will keep its Wizards of the Coast unit, rejecting calls from an activist investor to spin off the profitable unit and refresh the toy maker’s board with its director nominees.
Elizabeth Hamren and Blake Jorgensen, executives with experience in gaming, technology, operations, and capital allocation joined the board as independent directors this month expanding the board’s size to 13 members, the company said.
Hamren was chief operating officer at voice, video and text communication service Discord Inc and has experience working on Microsoft’s Xbox products while Jorgensen previously served as chief financial officer at video game company Electronic Arts .
Board chairman Rich Stoddart called Hamren and Jorgensen “proven, experienced leaders” who will add “tremendous incremental value and critical thinking.”
Hasbro’s announcement comes one week after it turned down a settlement offer from Alta Fox Capital Management LLC to add one of its nominees to the board and pick a second member on its own. Alta Fox also pushed Hasbro to consider spinning off the Wizards of the Coast unit to boost its lagging share price, something the company said on Monday it will not do.
A spin off “is unlikely to create value, is contrary to Hasbro’s strategy, and would negatively impact the benefits Wizards realizes today from Hasbro’s Brand Blueprint on a consolidated basis,” Stoddart wrote in a letter.
The unit, which publishes Dungeons & Dragons and Magic: The Gathering, saw its revenue grow 42% in 2021.
Hasbro’s new CEO, Chris Cocks, used to head the Wizards unit and wrote in a separate letter on Monday “the fundamental game plan we used at Wizards will be the roadmap we follow for the rest of Hasbro.”
The company, valued at $11.7 billion, will focus on “fewer, bigger strategic priorities and scale, driving sustainable, profitable growth across bets with billion-dollar plus revenue potential,” he added.
Alta Fox, which owns a 2.5% stake in Hasbro, nominated five directors to the company’s board earlier this year and the company said it interviewed the two nominees the hedge fund made available to be interviewed.
Alta Fox said earlier that it supported Cocks but that he should be surrounded by a “meaningfully refreshed board.”
Alta Fox on Monday called Hasbro’s move “defensive” and “reactionary” and signaled it will press on with a board fight. “The Board’s desire to continue operating Hasbro like a family business is a flashing red light for change and an obvious indicator that shareholder-appointed directors are needed at the Company.”
(Reporting by Svea Herbst-Bayliss; Editing by Tomassz Janowski)
