WotC Proxy Battle Heats Up – Hasbro Slams Spin-Off Plans
As Hasbro’s 2022 Shareholder meeting looms, WotC’s parent company urges shareholders to vote against Alta Fox’s “dissident director nominees.”
In a letter to shareholders released this past Monday, Hasbro’s Board of Directors fired back against “activist investor” Alta Fox Capital Management. The letter urges shareholder to reject Alta Fox’s proposed nominees to Hasbro’s Board of Directors at the upcoming June 8 Shareholder meeting, citing a lack of industry experience among others.
In other words, the proxy fight is heating up. Alta Fox Capital Management, who holds a 2.5% stake in Hasbro, recently made waves. They called for Hasbro to spin WotC off into a separate company. They launched a video campaign and website titled “Free the Wizards.” Part of their campaign proposes nominating five new members to Hasbro’s Board of Directors.
At the beginning of April, Hasbro rejected both Alta Fox’s proposal and nominees. Nevertheless, Alta Fox continues the campaign.
Shareholder Letter Addresses the Hasbro Proxy Battle
Hasbro’s Shareholder Letter outlines their position on the proxy fight, calling it “ill-timed”.
“Alta Fox’s agenda will not create value for shareholders and its nominees offer no beneficial experience to Hasbro’s Board or the Company.”
The letter highlights that Chris Cocks, new CEO and former president of WotC. It says that he “doubled the size of the Wizards business over a three-year period”. It also outlines the alleged lack of industry experience among Alta Fox’s nominees.
According to the letter, Jon Finkel, the 2000 Magic: the Gathering World Champion, “has no experience in leadership roles.”
“He is first and foremost a gamer and fan and does not have experience in driving growth and strategic value at digital gaming companies, smartly allocating capital or delivering returns for shareholders. We welcome his passion for our products, but passion for a couple of product lines does not qualify him to sit on our Board.”
Another nominee, Matthew Calkins, is rejected based on an alleged history of “shareholder unfriendly governance practices.”
Matthew Calkins […] has a history of shareholder unfriendly governance practices. Appian maintains a dual class share structure in which Mr. Calkins controls 77% of the voting power. Furthermore, Appian’s stock price has fallen 79% since its January 2021 peak. At the same time, Mr. Calkins has told the media that he does not pay attention to Appian’s stock price, stating, “I don’t take it seriously and I don’t think anybody should. Stock prices move up and down.”
Hasbro Rejects Alta Fox’s Mismanagement Claims
But the letter doesn’t just urge voters to reject Alta Fox’s nominees. It also refutes the validity of their proposal to spin off WotC.
“Alta Fox’s claim that Wizards has suffered as part of Hasbro and is starved of resources could not be further from the truth.”
The letter outlines the growth of Wizards into a billion-dollar business by the end of 2021 as proof. It also implies that Alta Fox’s analysis doesn’t paint a full picture:
“Alta Fox has cherry picked its numbers and refuses to acknowledge that despite recent challenges, including the disruptive industry-wide impacts of the COVID-19 pandemic, Hasbro has delivered strong returns for our shareholders over the long term.”
The full letter goes into much more detail. You can read it here.
Whatever the case, the proxy battle between Hasbro and Alta Fox has its next big clash set for June 8th.
Happy Adventuring!
