Approach for 4Kids
4Kids Entertainment said it had received “non-binding indication of interest from a third party” to buy out the company, as it released its results for the first quarter.
The firm will now enter into discussions with the potential buyer “regarding exclusivity and the acquirer’s indication of interest”, as well as providing due diligence information.
4Kids announced last August that it was exploring alternatives, including a merger or sale of the company. Reporting its Q1 results, the company said that revenues had fallen from $9.3 million to $4.2 million, while net loss widened from $2 million to $3.5 million. 4Kids is also facing a New York Stock Exchange delisting, now that its market cap has fallen below $15 million.
Alfred R. Kahn, 4Kids' chairman and CEO commented: “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 the company.”
Kahn added: “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. We believe that we have a promising pipeline of new properties, some of which will debut at next month's Licensing Show in Las Vegas. With the dramatic reductions to our cost structure, we can become profitable if any of our new properties gain traction.”
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