Hasbro Picks Up High-Powered Playmates

Toy industry kingpin Mattel Inc. on Tuesday continued its campaign to woo shareholders of rival Hasbro, urging the maker of GI Joe to reconsider walking down the aisle with Barbie’s producer in a $5.2-billion buyout offer.

Hasbro, meanwhile, picked up some high-profile Hollywood support for its effort to remain independent. Steven Spielberg, Jeffrey Katzenberg and David Geffen--the entertainment whizzes behind DreamWorks SKG, which in August announced a toy-marketing agreement with Hasbro--wrote company Chairman and Chief Executive Alan Hassenfeld a three-paragraph letter saying it was in “everyone’s best interest” that there be two independent toy companies competing worldwide.

Hasbro stock marked time Tuesday, closing unchanged at $43.75 a share on the American Stock Exchange. Hasbro’s stock price has shot up nearly 43% since Mattel, based in El Segundo, disclosed last week that it had made an offer and been shunned by Hasbro. Mattel rose 75 cents a share to $32.50 on the New York Stock Exchange. News of the DreamWorks letter was released by Hasbro after the markets closed.

Mattel has offered 1.67 of its shares for every share of Hasbro, or $54.28.

The two companies’ CEOs exchanged letters Tuesday, with Mattel Chairman and Chief Executive John Amerman telling Hassenfeld: “It is incumbent on both of us to finalize this transaction so that your shareholders can receive a premium of over $2.2 billion.”

For his part, Hassenfeld reiterated Pawtucket, R.I.-based Hasbro’s concern that antitrust regulators would refuse to allow the union. “We continue to believe,” he wrote, “that the probability . . . is very low in light of the extremely serious antitrust issues worldwide.”

Mattel has said that antitrust concerns would not scotch the deal. However, Rhode Island Atty. Gen. Jeff Pine and his Connecticut counterpart, Richard Blumenthal, issued a statement Tuesday saying they fear that a merger would drive up toy prices.

Mattel, with $3.2 billion in 1994 sales, and Hasbro, with $2.7 billion in revenue, are far and away the leaders in the world toy market. In addition to Barbie, Mattel produces such household names as Hot Wheels and Fisher-Price toys for tots. Hasbro is strong in “boys’ toys,” such as GI Joe and Tonka trucks, and in board games, including Monopoly and Scrabble.

DreamWorks’ interest is notable at a time when the toy business is becoming increasingly driven by licensing. The most recent boffo example of tie-ins is with the Walt Disney Co. film “Toy Story,” which features a variety of older toys (including Hasbro’s Mr. Potato Head) that have experienced renewed interest as a result.

DreamWorks Toys, the partnership with Hasbro announced last summer, is designed to create original toy lines and games as well as toys and games emanating from DreamWorks’ motion picture, TV and interactive projects. It expects to have its first products on the market next year.

Both Mattel and Hasbro have long histories of hooking up with entertainment studios. Mattel, for example, has partnered with Walt Disney Co. since 1955, when it began making toys based on the Mickey Mouse Club. Since then, it has been a licensee for products related to such blockbuster films as “Pocahontas,” “Aladdin” and “The Lion King.” Mattel, which derives 13% of its sales from Disney-related products, also sponsors the “It’s a Small World” ride at Disneyland.

Hasbro also works with Disney, but to a far lesser extent. It makes gargoyles based on a Disney TV program, Playskool board games and Winnie the Pooh products. But Hasbro, which surpasses Mattel in Hollywood hookups, has also scored with products linked to big movies for a variety of other studios, including “Jurassic Park,” “Batman Forever,” “Ghostbusters” and “Star Wars.”

The DreamWorks Toys venture could suffer should powerhouse Mattel take over Hasbro. Much of the return on such deals grows out of distribution rights. With less competition, DreamWorks and other firms would have less leverage.

Joele Frank, a Hasbro spokeswoman in New York, said Mattel’s continued unwanted attention could harm its rival should a regulatory investigation drag on. “It could harm the creative and competitive process,” she said. “The major issue is renewing arrangements with investors, developers and studios in an increasingly licensing-driven business.”

The Associated Press contributed to this report.