4Kids considering buyout offer - Licensing.biz

4Kids considering buyout offer

Troubled licensing company could be rescued by unnamed third party.
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4Kids Entertainment has received 'an indication of interest' from a third party to acquire the troubled firm.

On the same day that the company reported a loss of $3.5 million for the first quarter ending March 31st 2010, 4Kids stated that the potential acquirer was being given due diligence information.

The price on offer represents a premium over the recent closing prices for the company's common stock, subject to the completion of due diligence and negotiation of definitive agreements during a requested exclusivity period.

Further bad news for 4Kids came with the announcement that its market capitalisation had slipped below the minimum $15 million that New York Stock Exchange listed companies are required to maintain in order to remain listed. The company's shares could be delisted at any time.

As of March 31st, 4Kids had $9.3 million in cash and $11.7 million in investment securities at their fair market value.

Alfred Kahn, 4Kids chairman and CEO, stated: "In the first quarter of 2010, our revenue decreased from the comparable period in 2009 due to lower licensing revenue and reduced television advertising revenue. Although first quarter 2010 Yu-Gi-Oh revenues were essentially flat, the company received reduced licensing revenues from several properties formerly represented by it.

"Although 4Kids is a smaller, more streamlined company, we continue to have the necessary skills, experience and liquidity to promote our current properties, invest in new properties and generally rebuild the business," Kahn continued.

"With the dramatic reductions to our cost structure, we can become profitable if any of our new properties gain traction."

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