Jakks Pacific has received a non-binding proposal of interest from Hong Kong Meisheng Cultural Company, a subsidiary of the California-based toymaker’s Chinese distribution partner Meisheng Cultural and Creative Corp., to acquire a 51% stake in the company.

Meisheng Cultural Company sent a letter dated January 25, 2018 to Jakks containing an expression of interest in buying additional shares of Jakks’ common stock for US$2.95 per share.

If the transaction is completed, Meisheng’s stake in the company would increase to 51% from the company’s US$19.3 million equity stake it acquired in March 2017.

Subject to due diligence and approval by Meisheng’s board of directors, shareholders and Chinese regulatory authorities, Meisheng expects to fund the takeover through a combination of existing cash and/or other financing sources needed to restructure or refinance Jakks’ outstanding senior convertible senior notes.

Hong Kong Meisheng currently holds 5,239,538 shares of Jakks common stock, representing 18% of Jakks’ issued and outstanding shares of common stock.

Meisheng Culture and Creative Corp. has acted as a manufacturer and distributor for Jakks products in China for several years. Jakks also collaborated with Meisheng Culture and Creative Corp.’s animation studio Rising Anime in 2016, when it became a JV partner in Studio JP. The new animation company that produces original multiplatform content based on Jakks’ proprietary IPs developed specifically for digital distribution. Studio JP is also developing an app featuring augmented reality,  as well as a line of toys slated for a fall 2018 launch.

Jakks recently strengthened its digital marketing team by hiring former Jakks brand manager Jared Wolfson to fill the newly created position of SVP of digital marketing and Studio JP.

The company is coming off a disappointing Q3 that saw declines in net sales and adjusted EBITDA that were significantly impacted by Toys “R” Us’ recent bankruptcy filing.