Glass Lewis backs all Hasbro directors in boardroom fight with Alta Fox

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BOSTON (Reuters) – Proxy advisory firm Glass Lewis on Friday recommended that Hasbro (NASDAQ:HAS) shareholders reelect all of the company’s director nominees, dealing a blow to hedge fund Alta Fox’s effort to replace three board members.

“We do not believe there is a sufficient basis to support the board changes sought by (Alta Fox),” Glass Lewis wrote in its report, adding “the preponderance of the evidence validates Hasbro’s strategy and business model.”

Alta Fox, which owns a 2.5% stake in the toy maker, has urged Hasbro to spin off its Wizards of the Coast and Digital Gaming unit and criticized its takeover of Entertainment One in 2019, its Brand Blueprint strategy and how it allocates capital.

It wants to replace three board members, including the board chairman, the current chair of the compensation committee and the previous chair of the compensation committee.

Hasbro has nominated 13 directors including two new members who were appointed to the board last month.

Investors will vote on the matter next month.

Proxy advisory firms Glass Lewis and its bigger rival Institutional Shareholders Services, which has not yet issued its report, often guide investors on how to vote in board room battles.

An Alta Fox spokesperson said the Glass Lewis report “appears to omit significant and critical facts pertaining to Hasbro’s long-term failings and stagnation,” including the share price drop. “We’re confident our fellow shareholders will not be swayed by what comes across as a flawed and poorly informed recommendation for undeserving incumbents.”