Jakks Pacific Inc. shares jumped 23 percent Wednesday morning, a day after Oaktree Capital Management LP announced a hostile $670 million takeover bid for the Malibu toymaker after failing to work out a friendly deal.

Oaktree's $20-per-share offer is a 25 percent premium to Jakks' closing price on Tuesday. The Los Angeles investment management firm has a 4.9 percent stake in Jakks, which makes action figures and other toys based on properties licensed from Disney, Hello Kitty, Cabbage Patch Kids and others.

In a letter sent to Jakks' directors that was released Tuesday night, Oaktree said it has been trying to work out a deal with Jakks management since March but had been rebuffed. Oaktree said it was prepared to take its offer directly to Jakks' shareholders if necessary.

Data compiled by Bloomberg indicates that the deal would be the biggest in the toy industry in more than five years. Oaktree said in its letter that it would be willing to increase its offering price if Jakks can show that there is additional value in the company. It said it is willing to provide "substantial capital resources" to enable Jakks to pay for future acquisitions, new licenses and its growth strategy.

Jakks Chief Executive Stephen Berman said in a letter sent Wednesday to Oaktree that his board would consider the bid, adding that management and the board intended to "continue to act in the best interest of the company and its shareholders."

Jakks reported 43 percent higher second-quarter net income of $4.24 million, or 16 cents a share, on 7 percent higher revenue of $132 million. In July it affirmed full-year earnings guidance of $1.32 to $1.35 per share.

Oaktree, which was founded in 1995 by billionaires Bruce Karsh and Howard Marks, manages about $85 billion that is mostly invested in debt and distressed assets. In June it filed to list its shares on the New York Stock Exchange, and is expected to be valued at between $8 billion to $9 billion.

Jakks shares were up $3.66 to $19.66 in midday trading on the Nasdaq.

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