Hasbro, which bought a 27 per cent stake in JW Spear in June 1990 and holds the North American rights to Scrabble, has snapped up irrevocable undertakings to accept the offer from Spear family-related trusts holding 24.9 per cent, giving it a potential 51.6 per cent holding, and it is making a general offer of 900p a share.
Francis Spear, chairman of JW Spear, said that the family trusts had acted independently of the board, which would be meeting this morning to give its formal response.
As the Hasbro offer has come out of the blue it seems likely that the JW Spear board will reject the offer as being too low and is likely to advise shareholders that it will be seeking alternatives to the Hasbro proposal.
JW Spear shares were last traded on 12 May at 740p and in early March were as low as 625p.
Talks between Hasbro and JW Spear have been taking place for some years, according to a spokesman for Schroders, adviser to Hasbro, although no discussions have taken place in recent months.
'We decided to move the process forward by getting more than 50 per cent of the company's shares. We hope to have meaningful talks with the JW Spear board next week.'
The spokesman said that the offer of 900p a share represented a multiple of 16.5 times JW Spear's fully diluted 1993 earnings, which compared with a historical multiple of 12 for Bluebird Toys, a leading independent UK toy maker.
Hasbro is one of the world's top marketing and distribution groups for toys, games and infant care products with sales last year of dollars 2.7bn (pounds 1.8bn) and a stock market value of pounds 2bn. Its sales in the UK in 1993 were pounds 100m compared with pounds 35m at JW Spear.
Scrabble accounts for about a quarter of JW Spear's sales. It is made in more than 20 languages, and versions in Turkish and Hungarian are being introduced this year. JW Spear has been branching out into several new board games.
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