Toy manufacturer Hasbro’s long-standing shareholders Boston Partners and Anchor Capital, aim to replenish its board with no less than one investor-nominated director and resolve a proxy contest with Alta Fox Capital Management, an activist investment company.
Boston Partners, holding a 2.26% stake in Hasbro and investing $96 billion for clients, said in an interview with Reuters on Tuesday that the board requires new directors. Furthermore, it is supporting the activist’s three director aspirants. It stated that a resolution would be an advantage to Hasbro and its shareholders.
“At this point, we are recommending to our Governance Committee to vote in favor of the Alta Fox nominees,” said a general counsel and director of sustainability and engagement at Boston Partners, William Butterly.
According to Butterly, Hasbro must upgrade capital allocation and shareholder returns, further stating that “a greater refresh of the board is necessary to drive positive change at the company level.”
He added his company is worried that Hasbro last month raised the board to 13 members from 11, rather than replacing current directors with the two beginners it added.
His remarks are aligned with what Anchor Capital, holding a 0.36% stake in Hasbro, told Hasbro’s board through a letter. Anchor, a 16-year shareholder of Hasbro, stated that the board would have advantages from having a shareholder-backed director or directors in the board’s seat to lay new perspectives and expertise, as per two sources familiar with the situation.
However, Anchor did not mention how it would vote in the proxy contest.
In February, Alta Fox Capital Management announced a 2.5% holding in the manufacturer of Play-Doh, Monopoly, and My Little Pony. In addition, it stated that it would appreciate a set of board seats and for the firm to think about off-shooting its Wizards of the Coast gaming unit. Since then, it has cut its roster to three director nominees.
Investors will vote on who becomes part of the board at Hasbro’s yearly meeting on June 8.
Ancora Holdings Inc revealed this month that it owns a 1% stake in Hasbro and called for the firm to think about a full or partial sale of Entertainment One, the platform that makes television shows and other content. Ancora also urged the board to reach a headway with Alta Fox.
The board “is always open to hearing shareholder perspective,” said a Hasbro spokesperson, and that it put Liz Hamren and Blake Jorgensen as directors in “response to investor feedback.”
Hasbro has added five new independent directors since 2016 and newly installed CEO Chris Cocks, she said.