Oaktree Capital Management LP’s contentious battle for control of Jakks Pacific Inc. is turning even nastier.

In a sharply worded letter last week, Oaktree said it has lost confidence in the board and management of Jakks after being repeatedly spurned in its efforts to buy the Malibu toymaker. Oaktree, an asset management firm in downtown Los Angeles that owns about 5 percent of Jakks’ shares, said it is “deeply concerned by the company’s financial performance and strategic direction,” and reiterated its desire to acquire the company.

“Oaktree has no confidence in the capability and credibility of the current board and management team,” Oaktree said in the letter. “Immediate change is required to preserve and protect the interest of public shareholders.”

The investment firm made an unsolicited bid of $20 a share in September, or about $670 million, a 25 percent premium over Jakks’ share price at the time. The toy company called the offer inadequate and has resisted subsequent acquisition attempts by Oaktree.

Immediately after Oaktree’s letter last week, Jakks Chief Executive Stephen Berman shot back in his own letter, suggesting that Oaktree was unfairly maligning the company. He pointed out that Oaktree’s latest overtures did not state a specific purchase price, and they remain contingent on several factors, including due diligence and financing.

“(The) letter is replete with mischaracterizations and misstatements, which we will address and correct at the appropriate time,” Berman said.

Jakks declined further comment. Oaktree did not respond to requests for comment.

Poor performance

Jakks is known for a range of licensed toy products featuring characters such as the Smurfs, Hello Kitty and Batman. Founded in 1995, the company has grown into one of the nation’s largest toy companies through a series of 17 acquisitions.

But its performance has fallen off in recent years. Annual revenue has declined each year from a high of $903 million in 2008 to $678 million last year. Net income for all of 2011 was $8.5 million.

The struggles have continued this year. Shares fell as low as $13.39 in January after disappointing holiday sales. The price has since rebounded and was trading last week at about $18. However, the company last week announced a loss of $16 million in the first quarter, compared with a $10.6 million loss a year earlier.

The company is hopeful that a new product line will turn things around. Jakks recently unveiled Monsuno, an original toy line and television series similar to Pokemon, and it was one of the bright spots in the first quarter. The show started airing in February.

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