TW to raise $ 500 million by selling Hasbro shares

Time Warner Inc. has taken a novel approach to selling off its stake in games maker Hasbro Inc.: It is taking its 14% stake in the game company and effectively turning it into notes for new investors. Those notes can then be exchanged for the actual Hasbro shares.

Analysts applauded the move, noting that TWI won’t be taxed on the sale of the stock until investors in the notes actually swap them for the Hasbro stock. The notes, called Liquid Yield Option Notes, or LYONs, are being offered by Merrill Lynch & Co. at a face value of $ 1.55 billion and mature in 2012.

The sale of the notes should bring $ 500 million to Time Warner, according to the company, which will be used to pay down some high-priced debt.

“Hasbro has been a magnificent investment for Time Warner,” said Mark Manson, an analyst with Donaldson, Lufkin & Jenrette. “The LYON issue appears to offer both the opportunity for further appreciation for the buyers and solve some tax issues for Time Warner.”

Time Warner acquired its stake in the Pawtucket, R.I., toy company in the early 1980s.

Want to read more articles like this one? SUBSCRIBE TO VARIETY TODAY.
Post A Comment 0

Leave a Reply

No Comments

Comments are moderated. They may be edited for clarity and reprinting in whole or in part in Variety publications.

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

More Biz News from Variety