Mega Brands in the news againhttps://www.winnipegfreepress.com/business/breakingnews/jakks-pacific-takeover-bid-could-boost-the-value-of-mega-brands-shares-analysts-129812713.html MONTREAL - A potential takeover battle for California toy company Jakks Pacific could help boost the value of Montreal-based rival Mega Brands as it tries to recover after a few difficult years, industry analysts said Wednesday.Oaktree Capital Management has offered US$670 million to purchase Jakks Pacific (Nasdaq:JAKK). The US$20 per share bid represents a 25 per cent premium over its closing price on Tuesday and the average closing price in the last 24 months.The offer prompted Jakks shares to soar by more than 22 per cent to US$19.56 in Wednesday trading on the Nasdaq exchange.Applying the valuation of Jakks to Mega Brands (TSX:MB) would put its value at around C$12 per share, representing a potential 33 per cent upside on its current trading price, says Martin Landry of GMP Securities."In our view, Jakks Pacific represents a good comparable to Mega Brands," Landry wrote in a report"This activity highlights interest in the toy industry, which has undergone consolidation for several years," .But Garrick Johnson of BMO Capital Markets said Oaktree's current offer would have little impact on his valuation of Mega Brands."If this offer goes higher, which it likely will, then it would indicate that Mega Brand might be worth a little bit more, but not at the current offer," Johnson said in an interview.Johnson said the private equity player sees value in Jakks' cash flow and earnings and lack of debt.The proposed takeover marks the second in the U.S. toy industry this year. Japan-based Tomy Company purchased RC2 Corporation.Jakks responded to Oaktree's interest on Wednesday by saying it will carefully consider the "conditional non-binding indication of interest" that is subject to the completion of financial and legal due diligence and financing.Although the toy companies have some similarities, Jakks's US$747 million in revenue last year was twice as high as the Canadian company's.. Mega Brands hopes to return to $500 million of annual sales within a few years.Should it become an acquisition target, Mega Brands would likely find possible suitors among big established toy industry players because of its portfolio, including pre-school construction toys, and the fact it too is "significantly undervalued," Johnson added.During its darkest period after a series of product recalls hammered its sales and profits, Mega Brands was thought to have been looked at by several potential buyers, including Jakks.But its fortunes have been improving following a recapitalization, attraction of new licences and development of products.Mega Brands has also hired two respected industry veterans: Drew Stevenson as head of North American sales and Tom Prichard as president of its stationery and activities business."I think things are looking better for them," said Johnson.Landry maintained his buy rating and target price on Mega Brands stock of C$11, which represents a potential upside of 22 per cent from current levels.He said challenges such as construction toy competition from Hasbro, rising input costs and a mature industry have already been factored into the current share price.However, licensing agreements for Halo, Need for Speed and others could boost revenues by 25 per cent or nearly C$100 million over three years.On the Toronto Stock Exchange, Mega Brands shares lost nine cents to C$8.90 in Wednesday trading