ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Saturday, February 3, 1996 TAG: 9602040014
SECTION: BUSINESS PAGE: A-6 EDITION: METRO
DATELINE: PROVIDENCE, R.I.
SOURCE: FRANK BAKER STAFF WRITER
TOYMAKER SAYS Hasbro was playing hardball over Mattel's takeover offer.
This Toy Story is over.
Barbie's maker, Mattel Inc., on Friday withdrew its hostile $5.2 billion takeover bid for Hasbro Inc., which markets Monopoly and had complained the combination would be shot down by regulators as anticompetitive.
The complaints of the No. 2 toymaker poisoned the chances for a deal, said an official from Mattel, the nation's leading toymaker.
In trading after Mattel dropped its offer, Hasbro plunged $6.121/4, or 15 percent, to $34.621/2 on the American Stock Exchange, while Mattel rose $1.121/2, or 3.5 percent, to $33.621/2 on the New York Stock Exchange.
In a letter Friday, Mattel chairman John Amerman withdrew the company's merger proposal for Hasbro, which makes G.I. Joe action figures, Mr. Potato Head and board games.
Amerman criticized Hasbro for using its political connections to turn the merger proposal into a public fight.
``Clearly a premium of more than $2.2 billion to Hasbro shareholders, together with the prospects for future growth of this combined entity, would have been outstanding,'' Amerman wrote to Hasbro's chairman, Alan Hassenfeld.
``Despite this, you elected to take drastic steps, both politically and through the media, to greatly increase the difficulty of achieving a merger in a timely manner. Unfortunately, your scorched-earth campaign has created an intolerable climate.''
Mattel, based in El Segundo, Calif., offered 1.67 of its shares for every share of Hasbro, or about $54 a share. When the deal was disclosed last week, Hasbro's stock shot up 50 percent. It peaked at $46.75 on Jan. 24.
In fighting the offer, Hasbro officials said they were convinced regulators would reject the deal, believing it anticompetitive to create a company seven times larger than its next-biggest competitor.
In a letter to shareholders, Hassenfeld reiterated the antitrust concern and said he is ``most pleased'' Mattel backed down.
``I am firmly convinced that our board did the right thing in unanimously rejecting their unsolicited proposal because of the very serious antitrust issues raised by it and the resulting very low probability that a transaction could be accomplished,'' he wrote.
Amerman noted his company investigated antitrust concerns and was assured the deal was possible. Mattel offered Hasbro $100 million if the offer was rejected because of antitrust concerns, he said.
Harold Vogel, an analyst with Cowen & Co. in New York, believed the deal eventually would have been approved, ``but it would have been very costly and very nasty for both.''
``Mattel came to the conclusion it wasn't worth the fight. Mattel can go on its merry way acquiring smaller companies and not have the headache of fighting these political battles,'' he said.
LENGTH: Medium: 59 linesby CNB