Santa Monica-based toy-maker Jakks Pacific Inc. fended off a takeover bid from a Chinese toy and entertainment company looking to expand its footprint into U.S. markets.
Jakks, the heavily indebted maker of toys and collectibles for media companies such as Walt Disney Co., announced earlier this month that it had made a deal to recapitalize $140 million in debt due next year.
“The recapitalization transaction is like the dawning of a new day for Jakks,” Chief Executive Stephen Berman told investors earlier this month. “We’re invigorated and look forward to taking advantage of our many opportunities.”
Hong Kong-based Meisheng Cultural Co. Ltd., a subsidiary of a Chinese toy-maker and children’s entertainment company that already has a stake in Jakks, had sought to buy the publicly traded company.
Jakks had been struggling as revenues declined year over year and debts piled up. Under the recapitalization, $140 million in debt maturities will be extended until 2023.
On top of the fiscal squeeze, Jakks was hit hard by the closure of Toys R Us last year. Nasdaq threatened to delist Jakks earlier this year for failing to hold a shareholder meeting. More recently, Jakks shares have fallen below $1.
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