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Learning Co. in Black, Expects 'Material' Profit

March 06, 2001|From Times Wire Services

The buyout firm that acquired troubled Learning Co. from toy giant Mattel Inc. last year said Monday that the software maker is now in the black and will generate "material" profit in 2001.

Gores Technology Group announced it would buy Learning Co. from Mattel five months ago as the unit was losing $1.5 million per day.

Mattel bought Learning Co. in 1999 for $3.5 billion, but virtually gave the unit to Gores in exchange for a share of future profit after Learning Co. continually lost money and dragged Mattel's stock down to 52-week lows.

Gores declined to give specific profit projections, but said it has laid off about 300 people from the unit's international and distribution divisions, bringing its work force to about 1,200 employees.

Gores also said Monday that it has signed an agreement to sell Learning Co.'s entertainment division, with about 60 employees, to Ubi Soft Entertainment for undisclosed terms.

"Over the next several years, Learning Co. will be working to leverage its technology, brands, partners and customer base to continue to be a leader in consumer technology," said Learning Co. President James Bailey.

In other news, the world's largest toy maker said it will let its "poison pill" plan, intended to prevent a hostile takeover, expire early next year.

Mattel's board decided Thursday to let the poison pill elapse because 65% of shareholders voted to abolish the plan at last year's annual meeting. Under certain circumstances, though, the board has "the power to revisit the poison pill and consider bringing it back," said spokeswoman Lisa Marie Bongiovanni.

Shares of El Segundo-based Mattel fell 22 cents to $16.78 on the New York Stock Exchange. The toy maker has had a poison-pill plan in place since 1986.

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Bloomberg News was used in compiling this report.

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