Santa Monica-based Jakks Pacific has authorized its advisors to begin negotiations on a takeover offer received in January from Hong Kong-based Meisheng Cultural Co., the toymaker announced in its third quarter earnings call.
Jakks partnered with Meisheng in November 2014 to bring its products to China. Earlier this year, Meisheng expressed interest in acquiring additional common stock of the company at $2.95 a share. Meisheng already has an 18 percent stake in Jakks and if the deal goes through, it would increase its voting rights to 51 percent.
See related story Santa Monica Toy Maker Jakks Receives Takeover Offer from HK Company
When pressed by analysts on the call about the time frame for the takeover, Stephen Berman, Jakks Pacific chief executive did not specify details.
“There's no timelines, they're working diligently and expeditiously,” he said. “The special committee, as we said, authorized our advisors as well as Meisheng’s advisors to move forward. So, at this time, there's no specific timeframe.”
Jakks also reported a 10 percent decrease in third-quarter earnings to $236 million from $262 million compared to the same period last year. Berman said the company was still hurting from the Toys R Us bankruptcy despite the completion of the retailer’s liquidation prior to the beginning of Jakk’s third quarter.
“Not only did the industry lose a significant customer, but the actions taken by its competitors during the liquidation and since have led to some uncertainty,” Berman said in the call.
Jakks Pacific closed at $2.41 a share, up six percent from the previous close of $2.24.
Manufacturing, retail and trade reporter Shwanika Narayan can be reached at firstname.lastname@example.org or 323-556-8351. Follow her on Twitter @shwanika.
For reprint and licensing requests for this article, CLICK HERE.