NEWSWIRE - February 6, 1996
TOPIC: Mergers and Acquisitions, Hostile Takeovers,
Dropped Takeover Bids
SOURCE: "Hasbro Faces New Struggles Post-Mattel,"
by Andy Pasztor, Joseph Pereira, and Steven Lipin, Wall
Street Journal, February 6, 1996, A3-A4.
SYNOPSIS: The article describes the announcement
by Mattel that it is dropping its effort to acquire Hasbro
at a 73 percent premium. Hasbro's stock price fell by 15 percent
upon the announcement. The tactics used to fight off the merger
offer, and the pressure placed on Hasbro to now increase its
stock price, are discussed.
DISCUSSION QUESTIONS:
1. How would you classify the economic type of this merger?
What is the source of the 73 percent increase in Hasbro's
value?
2. Why would Mattel offer an initial premium of 73% for
Hasbro?
3. How did Hasbro management convince Mattel to drop its
bid? Was this good for Hasbro's shareholders?
4. After the dropped bid by Mattel, why did Hasbro's stock
price not drop to its level prior to the bid being announced?
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