Activist investor Alta Fox Capital Management wants play and entertainment company Hasbro Inc. to make its Wizards of the Coast unit a separate entity and add five new board members as part of an overhaul to its business strategy.
Alta Fox, which owns 2.5% of Hasbro, is pushing for sweeping changes to the company’s strategy, replacing it with a focus on growing profitability in its consumer products and entertainment divisions.
“We believe Hasbro, Inc. (‘Hasbro’ or the ‘Company’) is severely undervalued due to its ineffective ‘Brand Blueprint’ strategy, flawed corporate structure and consistent misallocation of capital,” Alta Fox posted on its website, calling for Hasbro’s changes.
The company says making Wizards of the Coast and Hasbro’s digital gaming division, including Dungeons and Dragons and Magic: The Gathering, its own entity, will at least double Hasbro’s share price to $200 or more.
“Alta Fox Capital Management, LLC (‘Alta Fox’ or ‘we’) has nominated a slate of five highly qualified and independent candidates to the Board of Directors (the ‘Board’) to improve alignment, restore accountability, bring fresh ideas and ultimately reverse Hasbro’s chronic underperformance,” the home page of the site says.
The strategy will bring Hasbro “a refreshed Board, new strategy, improved capital allocation and tax-free spin-off of Wizards of the Coast,” according to Alta Fox on its website, www.freethewizards.com.
Chris Cocks, former president of Hasbro’s Wizards of the Coast unit, will be the company’s new CEO as of Feb. 25. He’ll take over for interim CEO Rich Stoddart, who has served in the role since longtime CEO Brian Goldner died in October.
Hasbro announced new leaders for its Wizards of the Coast division on Feb. 2.
Related: Hasbro’s Digital Gaming Segment Leads Toymaker’s Q4 Results
Earlier this month, Hasbro announced its annual earnings, led by the Wizards of the Coast and Digital Gaming segment. Wizards of the Coast and digital gaming revenues were up 42% for 2021, part of an overall 17% jump in net revenues for the company up to $6.42 billion.
For the year, the entertainment segment of the business was up 27%, while revenue for Hasbro’s consumer products segment was up 9%.
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