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American Greetings Temporarily Blocks Cookie Jar/DIC Merger

According to KIDSCREEN Magazine, a deal announced earlier on Friday between Cookie Jar Ent. and DIC Ent. has been temporarily blocked by an Ohio judge.

Ohio Court of Common Pleas Judge Dick Ambrose granted the request to American Greetings, who argued that the long-standing agreement with DIC that gives them the licensing and merchandising rights to STRAWBERRY SHORTCAKE prohibits DIC's sale to a competitor without first obtaining American Greetings' consent.

STRAWBERRY SHORTCAKE earned $74.7 million last year for DIC, with licensing and merchandising accounting for more than 68 percent. DIC President and COO Jeffrey Edell said STRAWBERRY is on track to earn $28 million of DIC's projected overall revenue of $80 million in 2008 -- meaning STRAWBERRY accounts for about 35 percent of all of DIC's revenues.

American Greetings Properties President and CEO Josef Mandelbaum said they were informed of the sale some time after DIC and Cookie Jar agreed to the deal. "We are the underlying owners of STRAWBERRY SHORTCAKE," he said. "We asked that they not sign anything until we had an agreement to move forward. They elected to do it without our consent, and all we're doing now is invoking our rights in the contract." Mandelbaum added, "We're disappointed that it came to this, but this is the path [DIC and Cookie Jar] chose to go down; they cannot close the deal based on the judge's order today...our objective is to stop the deal moving forward without our consent."

Edell countered by saying DIC and Cookie Jar had been expecting American Greetings to make a formal objection. "It has been fully accommodated for in our arrangement with Cookie Jar," he said. "It won't cause Cookie Jar to back out of the deal," he said. "We believe this is totally unfounded and we will be prepared to fight and get it overturned."

Cookie Jar CEO Michael Hirsh, when contacted in Toronto by KIDSCREEN, said he could not comment as he had yet to view the court document.

The Ohio court will set a hearing date now; the injunction is temporary.

Rumors that DIC founder Andy Heyward would be leaving the company turned out to be not true; he is in the process of negotiating a new contract with Cookie Jar to continue leading DIC under the Cookie Jar Group banner.