Hasbro Chief’s Death Sparks Sale Rumors

The death over the weekend of Stephen D. Hassenfeld, chairman and chief executive of Hasbro Inc., raised questions Monday on Wall Street about the giant toy company’s future.

Hassenfeld, 47, died of pneumonia and cardiac arrest Sunday night at Columbia Presbyterian Hospital, where he had been hospitalized for four weeks, Hasbro spokesman Wayne Charness said.

“I believe that within the next year, you will see the company sold. It’s an attractive property in the industry,” said Paul Valentine, an industry analyst at Standard & Poor’s Corp.

Valentine said he expects that Hassenfeld’s family, which owns 13.1% of the Pawtucket-based toy maker, eventually would re-examine its position. “With Stephen gone and the company now a larger, more bureaucratic organization, the fun has probably gone out of this business for the Hassenfeld family,” he said.

Trading Heavy

Valentine estimated that the company could sell for as much as $32 per share, perhaps higher if the company performs better than expected this year.

Hasbro stock closed Monday at $22.25, up 25 cents per share, on the American Stock Exchange. Its volume of nearly 1.2 million shares made it the second-most heavily traded issue on the exchange.

But, said analyst Walter Kirchberger at PaineWebber Group Inc., “Stephen’s absence doesn’t mean the company is without a leader . . . . That’s not to say that Stephen won’t be missed, but there are competent and qualified people” to run the company.

Charness said he did not know when Hasbro directors would meet to select a successor. Hasbro President Alan Hassenfeld, 40, who is Stephen Hassenfeld’s brother, has been running the company in combination with a team of senior management.

“We continue as we have for the last month,” Charness said.

Hassenfeld built Hasbro into a toy giant, with more than $1.3 billion in sales from well-known products that include G.I. Joe, Transformers, My Little Pony and Mr. Potato Head. The company’s revenue was $102 million 10 years ago.

Hassenfeld bought companies, such as Milton Bradley Co. in 1984, and developed a diverse line of low-cost products, although the company last year scrapped plans for an interactive video and electronic game system called Nemo after reportedly spending millions of dollars on research and development.

Built the Company

Hasbro recently announced that it would acquire assets of financially troubled Coleco Industries of Avon, Conn., maker of Cabbage Patch Kids and other toys.

“Stephen Hassenfeld stands out virtually without a peer in the toy industry over the past 10 years. He created what I refer to as the modern American toy company. A broadly based, well diversified toy company,” Valentine said.

Hassenfeld, who was born in Providence, joined Hasbro in 1964 and was named executive vice president of marketing and elected to the board in 1968. He became president in 1974 and chairman in 1980.

In mid-1987, Hassenfeld was treated, also at Columbia Presbyterian, for what he later said was endocarditis, a bacterial infection of the heart valve and lining.

His brother said Hassenfeld never fully recovered from the heart infection, partly because he was allergic to antibiotics used to treat the illness.

Word of Hassenfeld’s illness a month ago prompted heavy trading in Hasbro stock.

At the time, John T. O’Neill, Hasbro’s chief financial officer, dismissed rumors of a hostile takeover. The Hassenfeld family owns 13.1% of the company stock and Warner Communications owns 13.6% in a voting trust controlled by the Hassenfeld brothers. Hasbro has the right of first refusal to purchase Warner’s stock.

Nevertheless, Hasbro adopted a “poison pill” earlier this month that would give shareholders the right to buy additional stock at an advantageous price in the event of a hostile takeover.

HASBRO INC. AT A GLANCE Hasbro, based in Pawtucket, R.I., is a diversified toy manufacturer, one of the largest in the world. Among its product lines are Playskool preschool toys, G. I. Joe action figures and Milton Bradley board games.

Year ended Dec. 25 1988 1987 1986 Sales (billions) $1.36 $1.35 $1.35 Net income (millions) 72.4 48.2 99.2

Assets: $1.1 billion Employees: 8,200 Shares outstanding: 5.8 million 12-mo. price range: $13.75 to $22.375 Mon. close (AMEX): $22.25, up 25 cents

HASSENFELD OBITUARY: Part I, Page 22