After nearly four months, the battle to spin-off Wizards of the Coast (WotC), publisher of Dungeons and Dragons and Magic: The Gathering, has finally been laid to rest. Wizards’ parent company Hasbro and its rebel investor Alta Fox settled the debate with a shareholder vote at an annual meeting on June 8.
According to a statement from Hasbro, the preliminary results show shareholders voted “with a substantial margin” to retain the toy company’s current board of directors, including ex-Wizards president and now-Hasbro-CEO Chris Cocks. This means asset management firm and 2.6% Hasbro shareholder Alta Fox has had both its proposed Wizards of the Coast spin-off and director nominees rejected.
“Hasbro’s board of directors would like to thank our shareholders for their continued support and engagement, as well as the invaluable views and perspectives they have shared with us over these last several months”, Hasbro said in Wednesday’s statement. “As the vote indicates, our highly skilled and recently refreshed board possesses experience and expertise directly relevant to overseeing Hasbro’s world-class portfolio of assets across multiple play and entertainment categories.”
Alta Fox also issued a statement in response to the result. After campaigning to replace several board members and turn Wizards into a more independent entity, Alta Fox managing partner Connor Haley said “we thank our fellow shareholders for their thoughtful engagement and support throughout this year’s election contest”.
“We ran a campaign based on the facts: absolute and relative underperformance, numerous capital allocation blunders under long-serving incumbents, and extremely poor disclosure reflective of an insular culture” he added. “While we are disappointed in the outcome at today’s annual meeting, we agree with Institutional Shareholders Services, Inc. that all shareholders likely benefited from the campaign.”
Haley claims Alta Fox’s challenge to Hasbro (and the accompanying 100-page investor presentation) has benefitted games like D&D and MTG by “spotlighting the strength of Wizards of the Coast”. “This represents more analysis and focus on the business than Hasbro has shared with investors during its more than 20 years of ownership”, Haley says.
Haley also claims Alta Fox’s proposals helped provide improved disclosure for the D&D Beyond acquisition and encouraged the appointment of two gaming-focused directors. In previous statements, A large part of Alta Fox’s argument focused on Hasbro’s Wizards of the Coast investment not being enough, but Hasbro had shared heavy critique of Alta Fox’s arguments in shareholder letters.
“We will seek to maintain a dialogue with the board to ensure a culture of accountability is put in place as Chris Cocks develops and implements what will hopefully be a superior and well-articulated strategy for value creation”, said Haley.
In its own statement, Hasbro said, “our directors will be instrumental to Chris as he undertakes a strategic review of the business and outlines our go-forward strategy to position Hasbro for long-term success and delivery of shareholder value.” “We know we have important work ahead of us, and you will be hearing from us as we continue to actively engage with our shareholders.”
For more Hasbro news, check out why Magic: The Gathering had its best year ever in 2021. Or, for more D&D and MTG, check out everything we know so far about Commander Legends: Battle for Baldur’s Gate.