Item 1.01 Entry
into a Material Definitive Agreement.
Arrangement Agreement
On August 22, 2019, Hasbro, Inc. (“Hasbro” or “we”), entered into an Arrangement Agreement (the “Arrangement Agreement”), among Hasbro, 11573390 Canada Inc., a Canadian corporation and a wholly owned subsidiary of
Hasbro (“Acquireco”), and Entertainment One Ltd., a Canadian corporation (“eOne”), pursuant to which, subject to the satisfaction of the conditions set forth in the Arrangement Agreement, Acquireco will acquire all of the issued and outstanding
common shares of eOne by means of a statutory arrangement under the Canada Business Corporations Act (the “Acquisition”).
Subject to the terms and conditions set forth in the Arrangement Agreement, upon the effectiveness of the Acquisition (the “Effective Time”), each outstanding common share of eOne (subject to limited exceptions,
including shares with respect to which dissenters’ rights have been validly exercised in accordance with Canadian law, which will be transferred to Acquireco for a debt claim equal to fair value) will transfer to Acquireco in exchange for £5.60 per
share in cash (the “Consideration”).
The completion of the Acquisition is subject to satisfaction or waiver of (x) certain customary mutual closing conditions, including (1) the receipt of the required approval from eOne shareholders, (2) the approval of
the Acquisition by the Ontario Superior Court of Justice, (3) the receipt of required regulatory approvals, including pursuant to the Investment Canada Act, the Competition Act (Canada), the expiration or termination of the waiting period under the
Hart-Scott-Rodino Act, as amended, and certain other governmental consents, and (4) the absence of any law or injunction prohibiting consummation of the Acquisition, and (y) certain conditions in favor of Hasbro, including, (1) the absence of any
action or proceeding by a governmental entity in Canada, the United States, any member state of the European Union or the United Kingdom that would reasonably be expected to enjoin Hasbro’s ability to exercise full ownership rights over eOne or
that would have a Material Adverse Effect (as defined in the Agreement), (2) matters related to maintenance of “Canadian-control” of certain operations of eOne within the meaning of the Investment Canada Act, and (3) dissent rights not having been
exercised with respect to more than 10% of eOne’s outstanding common shares. The obligation of each party to consummate the Acquisition is also conditioned upon the other party’s representations and warranties being true and correct (subject to
certain materiality exceptions) and the other party having performed in all material respects its obligations under the Arrangement Agreement.
The Arrangement Agreement contains representations, warranties and covenants of Hasbro and eOne generally customary for a transaction of this type. Hasbro and eOne also agreed to use commercially reasonable efforts to
cause the Acquisition to be consummated and to obtain any required regulatory approvals.
The Arrangement Agreement provides that, during the period from the date of the Arrangement Agreement until Effective Time, eOne is subject to certain restrictions on its ability to solicit alternative acquisition
proposals from third parties and to provide non-public information to third parties and to engage in negotiations with third parties regarding alternative acquisition proposals, subject to customary exceptions.
The Arrangement Agreement contains termination rights for each of Hasbro and eOne, including, among others, (1) if the consummation of the Acquisition does not occur on or before December 31, 2019, subject to extension
to March 30, 2020 for certain limited purposes, including obtaining certain required regulatory consents, and (2) subject to certain conditions, if eOne wishes to terminate the Arrangement Agreement to enter into a definitive agreement with respect
to a Superior Proposal (as such term is defined in the Arrangement Agreement). Upon termination of the Arrangement Agreement under specified circumstances, including the termination by Hasbro in the event of a change of recommendation by the board
of directors of eOne or by eOne to enter into a definitive agreement with respect to a Superior Proposal, eOne would be required to pay Hasbro a termination fee of approximately £29.0 million.
The foregoing description of the Arrangement Agreement does not purport to be complete and is qualified in its entirety by reference to the Arrangement Agreement, which is attached hereto as Exhibit 2.1 and is
incorporated by reference herein.
The Arrangement Agreement has been included to provide investors with information regarding its terms. It is not intended to provide any other factual information about Hasbro, eOne or their respective subsidiaries or
affiliates. The representations, warranties and covenants contained in the Arrangement Agreement were made solely for purposes of the Arrangement Agreement and as of specific dates, were solely for the benefit of the parties to the Arrangement
Agreement, may be subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties to the Arrangement Agreement instead of
establishing these matters as facts, and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. Investors are not third-party beneficiaries under the Arrangement Agreement
and should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of the parties thereto or any of their respective subsidiaries or affiliates. Moreover,
information concerning the subject matter of representations and warranties may change after the date of the Arrangement Agreement, which subsequent information may or may not be fully reflected in Hasbro’s or eOne’s public disclosures.
Voting Agreements
Concurrently with entering into the Arrangement Agreement, certain of the directors and officers of eOne, (collectively, the “Support Parties”), entered into voting and support agreements with Hasbro and Acquireco
(collectively, the “Voting Agreements”), pursuant to which each of the Support Parties agreed, among other things, to vote the common shares of eOne held by them in favor of the Acquisition and certain related matters. As of the date hereof, the
Support Parties owned in the aggregate approximately 1.5% of eOne’s outstanding common shares. Each Voting Agreement automatically terminates upon the earlier of (1) the Effective Time, (2) the termination of the Arrangement Agreement in accordance
with its terms, (3) the amendment of the Arrangement Agreement in a manner adverse to the Support Party, or (4) the date on which the eOne board of directors changes its recommendation to shareholders with respect to the Acquisition.
The foregoing description of the Voting Agreements does not purport to be complete and is qualified in its entirety by reference to the full text of the form of Voting Agreements, a copy of which is attached hereto as
Exhibit 2.2 and is incorporated herein by reference.
Commitment Letter
Hasbro expects to finance the Consideration with the proceeds of debt and equity financing. Hasbro entered into a debt commitment letter, dated August 22, 2019, with Bank of America, N.A. (“BofA”) and BofA Securities,
Inc., pursuant to which, subject to the terms and conditions set forth therein, BofA (on behalf of itself and certain affiliates) committed to provide a 364-day senior unsecured bridge loan facility in an aggregate principal amount of up to £3.6
billion.