© Reuters. FILE PHOTO: The Hasbro, Inc. logo is seen on a toy for sale in a store in Manhattan, New York, U.S., November 16, 2021. REUTERS/Andrew Kelly
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 (NASDAQ:)’s Xbox products, while Jorgensen previously served as chief financial officer at video game company Electronic Arts (NASDAQ:).
Board chairman Rich Stoddart called Hamren and Jorgensen “proven, experienced leaders” who will add “tremendous incremental value and critical thinking.”
Hasbro (NASDAQ:) shares were up slightly at $84.58 on Monday.
Its announcement comes one week after Hasbro 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.
On March 27, Hasbro Chief Executive Chris Cocks told Alta Fox founder Connor Haley that the company was open to considering alternative settlement proposals from the hedge fund but was “willing to nominate only the most qualified director candidates,” according to a regulatory filing.
Alta Fox also pushed Hasbro to consider spinning off Wizards of the Coast to boost its lagging share price, something the company said on Monday it will not do.
A spinoff “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.
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. The company said it interviewed the two nominees the hedge fund made available to be interviewed.
The hedge fund earlier said 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,” it said.
