emerging apparently victorious.
Regulators could throw cold water
on the $87.6 million deal’s scheduled
closing of September 30, but that’s not
widely anticipated.
The deal puts Cookie Jar, a privately
held Canadian company, on the map as
one of the world’s largest independent
children’s entertainment companies.
Cookie Jar already owned popular
properties like PBS favorites Arthur
and Caillou, along with the Doodle-bops and Johnny Test, all aimed at the
under- 10 set. Along with Strawberry
Shortcake and Care Bears, Cookie Jar
gets other DIC (pronounced “deek”)
Entertainment properties like Inspector Gadget and Madeline.
While gaining in size and stature,
Cookie Jar still faces stiff competition
from the three heavyweights of children’s media: Walt Disney Co., Via-com Inc. (owner of Nickelodeon), and
Time Warner Inc. (owner of Looney
Tunes and Hanna-Barbera characters,
and the Cartoon Network).
American Greetings created Strawberry Shortcake and Care Bears in the
1980s. Though their popularity had
waned, in 2001 American Greetings
struck a licensing deal with Burbank,
California–based DIC Holdings for the
two properties. DIC done good. Since
the brands’ reintroduction in 2002,
Strawberry Shortcake and Care Bears
have generated more than $5 billion
in retail sales, with an estimated $300
million in revenue to DIC as a result.
In the spring of 2008, DIC put
itself up for sale. American Greetings considered bidding, but ultimately
decided not to. Cookie Jar did bid, and
in May the two parties started exclusive negotiations. That’s when things
started to get interesting.
According to Greg Gilhooly, general counsel at Cookie Jar, American
Greetings had told both parties that
the license agreement between AG
and DIC prohibited the sale of DIC’s
Strawberry Shortcake and Care Bear
licenses to Cookie Jar, unless AG gave
its approval. Gilhooly says that Cookie
Jar and DIC disagreed with that interpretation.
To neither Cookie Jar nor DIC’s
surprise, on June 21—the day after
they announced their deal—American
Greetings filed for an injunction in
Ohio state court to stop the deal going
forward. The case was removed to the
federal court in the Northern District
of Ohio within a week, and the parties wrangled simultaneously over the
case and a settlement for just over a
month.
“We spent a lot of time and money
on litigation, but all involved sensed
there would be a business solution,”
says Gilhooly.
And indeed there was. Gilhooly says
that the ensuing negotiations changed
nothing of substance in the original
deal between Cookie Jar and DIC.
What did change was who owned the
