Filed under: Deals, Management, Hasbro Inc (HAS), Marvel Entertainment (MVL)

The Marvel Entertainment (NYSE: MVL) release of the box office hit Iron Man, still No. 1 in world wide distribution, has got Hasbro Inc. (NYSE: HAS) rethinking its potential opportunities to leverage its stable of characters into bigger than life features.

Hasbro, the nation’s #2 toymaker, has reacquired the worldwide distribution rights to over 1,000 hours of animated programming.

Under the terms of its new deal with Sunbow Productions, Hasbro has regained ownership of 1,000 hours of cartoons featuring G.I. Joe, Transformers, My Tiny Pony and Littlest Pet Shop. With the tremendous success of the live action Transformers movie, and a second Transformers as well as a G.I. Joe live action film in production, Hasbro clearly wants full control over its intellectual properties in order to maximize their exploitation.

Hasbo shut yesterday pennies off it’s 52-week high of $37.35 and is trading around $36 midday today. Meanwhile Marvel also shut yesterday just off it’s 52-week high of $35 closing at $34.27. It is down now in midday trading around $34.50. However, it is up since I posted Chasing Value: Marvel’s Iron Man will be HUGE!

UPDATE: HAS closed at $36.26 down -$0.93, and MVL shut at $33.73 down -$0.54.

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money. Disclosure: I don’t hold any position or own shares of HAS or MVL.

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Filed under: Deals, Rumors, General Dynamics Corp (GD)

Radio World reported that Harris Corp. (NYSE: HRS) might sell itself. I just spoke with an analyst who stated that there’s a rumor that the suitor might be military contractor General Dynamics (NYSE: GD).

Harris is based in Melbourne, Fla., and has a market capitalization of $7.3 billion. Perhaps Harris thinks its growth potential in the defense industry is “less attractive” than anytime since Sept. 11, 2001. Harris has 16,000 employees and reported $5.1 billion in revenues and net income of $410 million over the last 12 months, ending March 28, 2008.

General Dynamics may be able to cut costs and increase revenues by combining the two firms. And Harris stock is clearly rising — it’s up 2.8%. Could it be due to this rumor? Please comment if you know more.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in the securities mentioned.

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Filed under: Deals, Microsoft (MSFT), Yahoo! (YHOO)

Back in the Roaring 1980s, Carl Icahn was known as a prototypical corporate raider as he went hostile on a myriad of old-world companies such as B. F. Goodrich and American Can.

Now, in his early 70s, Icahn hasn’t slowed down much. Funny enough, these days he’s targeting tech companies, like BEA, Motorola (NYSE: MOT) and, of course, Yahoo! (NASDAQ: YHOO). Hmmmm… maybe these companies have become bloated and mature — just like the laggards of the 1980s?

Perhaps so. After all, Icahn’s strategy is to agitate for change, such as for cost cutting, share buybacks and higher dividends.

As for his pursuit of Yahoo (which involves a proxy fight), it’s certainly a gutsy play. Simply put, there’s no guarantee that Microsoft (NASDAQ: MSFT) will come to the table again. So far, the company is doing a good job in showing disinterest.

One thing is guaranteed: Yahoo will fight back. In fact, the company has already responed to Icahn’s letter - saying that he has a “significant misunderstanding” of the facts regarding the proposed buyout of Microsoft.

What’s more, the CEO of Yahoo, Jerry Yang, has sent an email to employees and stressed that the company is on the right track. That’s, he highlighted the Q1 results (which, to me, weren’t spectacular).

Yet, Icahn likely has much support as there are major hedge funds in Yahoo stock, and they are mostly interested in a swift payoff. For example, the mega hedge fund, Paulson & Co., has purchased 50 million shares of Yahoo, according to The Wall Street Journal.

Although, with the proxy process, it will be a bit of a slog, but that’s nothing new for Icahn. It’s all a part of his strategy.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar On the internet Guide to Decoding Financial Statements. He also operates MergerBook.com.

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Filed under: Deals, World wide web, Viacom (VIA), CBS Corp ‘B’ (CBS)

So the massive news on Thursday was CBS‘ (NYSE: CBS) hefty $1.8 billion buy of CNET (NASDAQ: CNET). Douglas McIntyre already explained why this was such a “weird deal” in an excellent article that you can read here. I’d like to expand on that thinking a bit by asking if it should have been Viacom (NYSE: VIA), as opposed to CBS, in the buying seat.

Remember “old Viacom”? Old Viacom was composed of CBS and “new Viacom”, the latter being the Viacom of this day. I know, confusing, but that’s how things are when a massive media conglomerate splits in two. Anyway, there was a general mandate given to both companies, one that basically said the logic of CBS being an entity that focuses on cash flows and dividend increases while new Viacom would focus on acquisitions to promote capital appreciation of the company’s stock. Sure enough, the yield on CBS tells the tale perfectly.

So, I have to ask, what gives? I mean, a check of CBS’ latest 10K shows that the broadcaster generated $2.2 billion in operational cash flow in 2007. I think paying $1.8 billion for anything, let alone a questionable asset vis a vis CBS’ core media competencies, might be too much given CBS’ mission to return a lot of value to shareholders over the long-term in the form of dividends.

And, since Viacom is the acquirer, maybe CNET should have been its target. I’m not necessarily saying Viacom should have fooled around with CNET either, but I just see more synergies between CNET and Viacom than I do between CBS and CNET. One quick example would be Viacom’s intense efforts to invest in video games, both casual and not-so-casual. Viacom owns the Rock Band brand, and has done well with it. CNET owns GameSpot and MP3.com, and from where I sit, I simply would see more of a fit with Viacom. CBS should just worry about growing ratings at its major broadcasting asset.

But, the die is cast it seems; as deal expert Tom Taulli pointed out, “old media” has a lot of money to spend on new media, so transactions like this should be expected. If I were a shareholder of CNET, I’d cash out and call it a day, and maybe even try to figure out what the next Internet-related buyout will be (for an opinion on that, check out this piece by Peter Cohan). If you’re a shareholder of CBS, keep a watch on management and make sure they don’t do too many pricey acquisitions such as this. Make sure they focus on the cash flow and the dividend.

Disclosure: I don’t own shares in any company mentioned here; positions can change at any time.

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Filed under: Business, Productivity, Troubleshooting

Things, the popular personal organization application from Cultured Code, is still in testing, but it already has a big userbase that is thoroughly addicted to its attractive to-do list features. It’s no surprise, then, that when the clock turned to midnight in Australia and Things suddenly expired, users were up in arms. Hours later, users in the US experienced the same problem. Several people congregated on the official Things help forum, which had nearly 50 postings on the problem as of 2:30 this morning.

Cultured Code hasn’t yet responded with an explanation of why Things was set to expire. The application is still free, but users have already come to rely on it, with more than one person posting that they would gladly pay the $49 pricetag Cultured Code will charge for the 1.0 release to continue using Things right now. Why the expiration, though? We anticipate to see either a swift fix or an update pushed out this morning — as the app is currently at version .9.1.1, the highly anticipated 1.0 release is possible, but not likely.

If you’re a Things user, visit the help forum for some unofficial ways of resolving the problem. So far, most people are either setting their computers’ dates back or using a hex editor to change the expiration date. Despite all the fuss, this could end up working in favor of Cultured Code. Our take: any publicity is good publicity when people are this frantic about your product.

Update: Version 0.9.1.2 is now available.

[via Duncan Riley]

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Filed under: Before the bell, Earnings reports, Deals, Microsoft (MSFT), Yahoo! (YHOO), Market matters, Kohl’s Corp (KSS), Abercrombie and Fitch (ANF), Economic data, Nordstrom, Inc (JWN), Housing

U.S. stock futures were higher this morning, looking to extend their rally, although investors will likely not like the upcoming housing data, which probably isn’t going to signal a bottom for the housing recession.

U.S. stocks had a nice rally Thursday as oil prices fell, several deals were announced, mainly CBS buying CNet, and Icahn moving forward with his proxy fight for Yahoo’s board. The Dow industrials rose 94 points, or 0.73%, the S&P 500 added 14 points, or 1.06%, and the Nasdaq Composite rose 37 points, or 1.48%. Thursday marked the fourth day of gains for the Nasdaq.

This morning, investors will be waiting for the housing data to roll in. Housing starts and building permits figures for April will be reported at 8:30 a.m. EDT. Both are expected to show further declines.
Also at 10:00 a.m. EDT, Might University of Michigan’s consumer confidence gauge for Might is due. Economists anticipate it to decline marginally.

Meanwhile, Goldman Sachs helped lift oil prices this morning after it raised its forecast for oil to $141 a barrel. The forecast was raised 32% from $107 a barrel and is for the second half of 2008. Oil prices were back above $125 a barrel.

Yahoo! (NASDAQ: YHOO) will continue to be in the spot light after it responded late Thursday to Icahn’s nomination of board members. Billionaire investor Carl Icahn is trying to gain control of the web company’s board so it could resume takeover talks with Microsoft (NASDAQ: MSFT). In response, Yahoo! said it would fight Icahn’s attempts.

Abercrombie & Fitch (NYSE: ANF) is due to report quarterly results. Other retailers in focus this morning are Kohl’s Corp. (NYSE: KSS) and Nordstrom (NYSE: JWN). Both reported after the close Thursday, posting double- digit declines in fiscal first-quarter net income and cut their earnings forecasts for the fiscal year.

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