What's going on?

US toymaker Hasbro went to market late last week and � after announcing the purchase of Peppa Pig-maker Entertainment One for $4 billion (its biggest acquisition ever) � cried �Wee wee wee!� all the way home.

What does this mean?

Hasbro went the whole hog, paying a little over 30% more than Entertainment One�s stock was worth on Thursday. But investors might be expecting a higher rival counter-offer, explaining why its share price overshot the proposed buyout value.


Hasbro�s hoping to develop toys and games around Peppa Pig with a view to making a big splash in the preschool segment � the most valuable age range. That strategy played well with Hasbro when it linked up with Disney for its Star Wars and princess movies. Investors will hope it�ll offer an uplift in revenue, as well as promised cost synergies.

Why should I care?

For markets: Weak pound, strong dollar.

The weakness of the British pound versus other currencies since 2016 has made its companies prime takeover targets for foreign buyers. A Hong Kong-based investor pigged out just last week on the UK�s largest listed pub chain for $6 billion. Hasbro�s cash, meanwhile, has gone further thanks to a strong US dollar, making this purchase cheaper than it otherwise would�ve been. Investors in other UK stocks might now wait with bated breath, hoping for a windfall if other British companies are bought out.

The bigger picture: Hasbro�s escape hatch.

The US�s decision to delay some import taxes on Chinese products will keep Hasbro�s earnings from getting fried through the all-important holiday season. But China�s announcement on Friday that it�s planning retaliatory tariffs on $75 billion worth of US goods makes it unlikely the US will hold off for much longer (tweet this). If Hasbro can avoid making a pig�s ear of Entertainment One�s television production business, it might offset those rising costs � and deliver some tariff-free income.