Subject:
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Re: *NEW* LEGO brick-ish Transformers by Hasbro -- What's the deal?
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Newsgroups:
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lugnet.general, lugnet.lego
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Date:
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Mon, 26 May 2003 13:58:01 GMT
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Viewed:
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1314 times
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In lugnet.general, David Laswell writes:
> In lugnet.general, Larry Pieniazek writes:
> > Whoa... do you have more info on that? Hasbro tried to buy TLC? When was
> > that? I did some googling to try to find more info, but it was inconclusive.
> >
> > Sounds like a fascinating subject for a Forbes or HBR article. Any info you
> > might be able to share would be gladly received at least by this reader.
>
> My boss receives a variety of industrial publications focussing on
> plastics and technology, and I believe he was the one who mentioned it to
> me, so it might have been buried in one of them. Industry news sometimes
> takes a while to trickle out into civilian news, assuming it ever makes it.
> I actually found out about the latest round of LEGO layoffs a few days
> before it started showing up more publicly, and I was reading about it in a
> publication that had been sitting on the front counter for at least a week
> before I poked through it.
>
> I'll have to ask my boss if he knows any more about this (likely they
> just called up and asked, "Can we buy you?" to which the response was
> probably, "Um, _HA_!") at a later time. I'd call and ask right now, but
> it's quarter after eleven, he gets less sleep than I do, and they've got a
> toddler, so a phone call at this time of night would be received only
> slightly more graciously as a brick through the front window.
>
> Anyways, it's not like this sort of thing would be completely
> unexpected. They bought Kenner, makers of the original Star Wars toys.
> They bought Galoob, the first company to start making post-1990 Star Wars
> toys. They bought Tiger Electronics, makers of SW hand-held video games.
> They bought _WotC_, makers of Magic: The Addiction, and the Pokecrack card
> games (who had already bought T$R, makers of D&D). TLC is the only existing
> company that makes successful SW toys that Hasbro hasn't bought, and they
> are the third largest toy company in the world (behind both Hasbro and
> Mattel, I believe), and I'm sure a day doesn't go by that at least one
> high-up executive doesn't curse under his breath for that fact.
>
> Fun/scary facts:
> Hasbro is the world's largest manufacturer of toys, but did you know that...
> ...TLC is the world's largest manufacturer of tires?
> ...Mattel is the world's largest manufacturer of clothing?
Well, to me a it would be unexpected if Hasbro was about to acquire TLC.
Some other facts:
It is not possible to make a hostile take over on TLC as the majority of the
stocks are held by the Christiansen family and their family foundation
According to TLC's annual statement for 2002, the equity ratio is as high as
57.2, which means that TLC should be well prepared for even a series of bad
years to come.
Not knowing Hasbro's financial capabilities, I would guess, that even if
Hasbro could pursuade the Christiansen family to sell, it would seriously
drain their funds. According to the annual statement, the equity is booked
to 6,952 milion danish kroner equaling about 1.08 bilion US$ (give and take
a few $$). And to find a hypotetical market price for the stocks you will
have to add the value of the Lego brand and the goodwill associated with it.
I don't have the slightest idea about this, but my guess is, that the
goodwill related to the Lego brand is worth at least the same amount as the
equity.
Then comes the question would it be feasible for Hasbro to pay say 2+ bilion
$ for a company generating a return on equity of about 6.2%, which perhaps
would fall to as low as 3.6% if the goodwill is worth 1 bilion $.
I am not saying that it couldn't be happening, but I don't think that a
take-over of TLC can be compared to the other take-overs mentioned and I
find it very unlikely hence the economics in a such deal and because of the
TLC's ownership, that this rumor is true.
I can add that I haven't seen anything about a such deal in the danish press
neither. And they usually write anything about TLC since it is one of the
largest danish company groups.
Martin
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