Hasbro In Talks on Early Buyout?

{mosimage}Or so it seems. The Wall Street Journal earlier reported that Providence Equity Partners had been talking with Hasbro to take the company private in a leverage buyout.

Private-equity firm Providence Equity Partners has held preliminary discussions with Hasbro Inc., one of the world's largest toymakers, to take the company private in a leveraged buyout, people familiar with the matter said.

However, one CNBC report states that Hasbro isn't involved in any talks regarding any potential sale of the toy company.

Hasbro Inc <HAS.N> said it is not involved in any talks regarding a potential sale of the company.

The No. 2 toymaker's shares rose as much as 9 percent in premarket trading after the Wall Street Journal reported that it was in early negotiations with Providence Equity Partners to take the company private in a possible leveraged buyout.

Hasbro confirmed it was approached by a private equity firm regarding a transaction, but it did not name the firm and its board had decided against pursuing it.

Read the original WSJ article excerpt, a CNBC article and another CNBC update, or read up at Business Week, and trade off comments here.

Business Week

Ahead of the Bell: Hasbro rises

The Associated Press June 24, 2010, 9:22AM ET

Shares of Hasbro Inc. rose in pre-market trading on Thursday after a media report suggested the toy maker might be in early rounds of talks to be bought out by a private equity firm.

The Wall Street Journal reported that Hasbro was in discussion with Providence Equity Partners and might be taken private. But the story stressed talks were early and no deal might materialize.

Other news outlets reported Hasbro wasn't in talks.

Hasbro shares rose 10 percent in pre-market trading before settling back to a 2.9 percent increase, or $1.18, trading at $42.30 before the market opened Thursday.

Providence Equity Partners said it had no comment and Hasbro did not respond immediately to a request for comment.

Wedbush Securities analyst Chris White called the report "credible."

"We expect Hasbro shares to rise significantly and believe this news will spark a 'rethink' of the appropriate valuation for toy stocks," White wrote in a note to investors.

White believes toy stocks are undervalued. He said it becomes "harder to make the case that other toy stocks are appropriately valued if the most expensive one in the space 'may' potentially be acquired at a substantial premium by a sophisticated buyer."

He reiterated his "Outperform" rating on the stock and raised his price target to $52 from $46, meaning he thinks Hasbro's stock could rise 21 percent over the next year.

 

 


CNBC

Published: Thursday, 24 Jun 2010 | 10:24 AM ET
By Paritosh Bansal and Dhanya Skariachan

NEW YORK (Reuters) – Hasbro Inc <HAS.N> said it is not involved in any talks regarding a potential sale of the company.

The No. 2 toymaker's shares rose as much as 9 percent in premarket trading after the Wall Street Journal reported that it was in early negotiations with Providence Equity Partners to take the company private in a possible leveraged buyout.

Hasbro confirmed it was approached by a private equity firm regarding a transaction, but it did not name the firm and its board had decided against pursuing it.

A source familiar with the matter told Reuters on Thursday Providence has had talks with the No. 2 U.S. toymaker. Providence was unavailable to comment.

Shares of the toymaker gave back some of those gains after the market opened, rising 3 percent to $42.24 shortly after the opening bell on the New York Stock Exchange.

(Reporting by Paritosh Bansal and Dhanya Skariachan; Editing by Derek Caney)


Wall Street Journal excerpt

Hasbro in Early Talks on Buyout

Private-equity firm Providence Equity Partners has held preliminary discussions with Hasbro Inc., one of the world's largest toymakers, to take the company private in a leveraged buyout, people familiar with the matter said.

The talks, whose status is unclear, are still in their early stages and may not lead to a deal, some of the people said. Other people familiar with the matter cautioned that the discussions, which had advanced over several weeks, could have come to a temporary halt given the uncertainty in the markets. Hasbro has a market capitalization of about $6 billion. A leveraged buyout of Hasbro, …

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