1. December 12, 2012 Mattel Acquisition of Hasbro Presented to: FIN5190 Presented by: Yuan Zou Kyle Patino

2. 2 Created a hypothetical acquisition scenario. Selected two S&P 500 companies. Mattel (“MAT”) as the acquirer with a market cap of 12B. Hasbro (“HAS”) as the acquiree with a market cap of 4.9B. Both companies are involved in the design, manufacturing and marketing of toys. Assumption is that there are synergies and cost reductions to be garnered. Goal is to utilize different modeling techniques to gauge the valuation and scenario analysis to determine if the acquisition strategy should be pursued. Project Overview

3. 3 Mattel Share Price (as of 10/2/2012)$ 35.43 Market Capitalization$ 12,077,000,000 HeadquartersEl Segundo, California Notable BrandsMattel, Fisher Price, American Girl, Thomas & Friends Sales Distribution76% US/Europe Hasbro Share Price (as of 10/2/2012)$ 37.80 Market Capitalization$ 4,922,700,000 HeadquartersPawtucket, Rhode Island Notable BrandsTransformers, My Little Pony, Play-Doh Sales Distribution38.5% North America Company Overviews

4. 4 Our project objectives include application of financial techniques such as the following: Establish the WACC for Hasbro Create a proforma and enterprise value for Hasbro Establish a stock exchange ratio for an all-stock transaction Consolidate the financial statements of Hasbro and Mattel, taking into account Goodwill accounting treatment Run scenario analysis of the combined entity with a base case, economic recession and economic growth Run crystal ball simulation to gauge the impact on the forward looking stock price Project Objectives

5. 5 Weighted Average Cost of Capital Calculation Company Valuation Consolidated financial statements and pro forma spreadsheet Crystal ball application Modeling Techniques

6. 6 Based on an 8.66% WACC for Hasbro, we conclude the enterprise value net of debt (purchase price) to be $2,984 million. Implied share price of $22.91 vs current share price of $37.80. Hasbro is overvalued. We assume conservative sales growth of 2%, but assume a 20% reduction in G&A expense as the result of cost saving synergies and headcount reduction. Once consolidated, base case implied enterprise value is $21,022 million with an implied share price of $41.26 (10.35% increase). Recession case (negative 1% sales growth), implied enterprise value is $16,652 million with an implied share price of $30.95 (17.22% decrease). Growth case (positive 5% sales growth), implied enterprise value is $25,914 million with an implied share price of $52.80 (41.21% increase). Crystal ball simulation ranges from $ 36.70 to $ 45.86 price per share. Conclusion