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Proxy advisory firms ISS, Glass Lewis back Hasbro in proxy fight

Published 05/27/2022, 10:06 AM
Updated 05/27/2022, 03:02 PM
© 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) -Proxy advisory firms Institutional Shareholder Services and Glass Lewis on Friday backed toymaker Hasbro Inc (NASDAQ:HAS) in a boardroom battle with Alta Fox, although ISS said the hedge fund has zeroed in on valid concerns and some change may be needed.

Alta Fox, which owns a 2.5% stake in Hasbro, criticized how the company allocated capital and its 2019 acquisition of Entertainment One. It urged Hasbro to spin off its Wizards of the Coast and Digital Gaming unit, and has nominated three director candidates.

ISS recommended shareholders withhold votes for Edward Philip, who has served on Hasbro's board for 20 years, to signal unhappiness.

Hasbro, valued at $12 billion, is known for making Monopoly and My Little Pony. Its stock price has fallen 19% in the last five years while the S&P 500 has climbed 70%.

In light of the company's uneven performance over the last seven years, ISS said some longer tenured directors -- four have served between 12 and 20 years -- should have retired.

But ISS stopped short of recommending that shareholders elect any of Alta Fox's candidates. Glass Lewis recommended shareholders re-elect all 13 company directors at the June 8 vote, saying, "The preponderance of the evidence validates Hasbro's strategy and business model."

© 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

ISS saw reason for "optimism" with Hasbro's new CEO, Chris Cocks, who used to run the Wizards of the Coast and Digital Gaming unit and was appointed in February after the previous CEO died. It said that spinning off the unit Cocks once ran is not an "appropriate solution at this time."

An Alta Fox spokesperson declined to comment on the ISS report and said the Glass Lewis report "appears to omit significant and critical facts pertaining to Hasbro's long-term failings and stagnation," including the share price drop.

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