MGA Entertainment founder and Chief Executive Officer Isaac Larian said he'll continue pursuing a takeover of LeapFrog Enterprises after his initial bid for the toymaker was rejected.

Larian, 62, said Monday in an interview that he has the money to increase his all-cash offer of $1.10 a share. LeapFrog shunned that proposal in favor of last month's deal to be acquired by VTech Holdings for $1 a share, or about $72 million.

"I don't think I'm the type of person who goes away fast," Larian said. "That company is worth a lot more than $1 a share, that's for sure. The brand has a lot of value."

Larian's nonbinding offer, which was made through a recently formed acquisition fund, would "not reasonably be expected to lead to a superior proposal," LeapFrog said in a filing last week. The company raised doubts about the financing and how long the deal would take to be completed.

"A significant delay in the completion of the merger could put at risk the ability of the company to continue operations," LeapFrog said.

The Emeryville-based company previously disclosed that it would likely face a cash crunch as early as late May if it didn't receive more capital through a takeover or another transaction. The proposal from Larian suggested a closing date of May 23. The VTech deal is scheduled to conclude April 4.


Larian questioned what has happened to the company's cash, which raised more doubts about the current management team. As for his proposal's financing, Larian said he'd fund the acquisition from his personal wealth and that a large bank has provided a letter to LeapFrog vouching that he has the funds.

"It's posturing," Larian said. "The board is breaching their fiduciary duties by rejecting an offer that is 10 percent higher."

LeapFrog declined to comment, and VTech didn't respond to requests for comment.

Larian also said he owned a "significant" amount of LeapFrog stock, but declined to say how much. He said he has talked to other large shareholders about his offer and that they're supportive. He declined to say which investors he's spoken to.

LeapFrog rose 2.5 percent to $1.01 at the close on Monday in New York. The shares have gained 78 percent since the VTech deal was announced Feb. 5.

Closely held MGA has been best known for its Bratz line of dolls, which it's trying to revive after years of being embroiled in a legal battle with Mattel. Larian said he owned 82 percent of the company he founded in 1979, with the rest held by his sister. If acquired, LeapFrog would be integrated into MGA, Larian said.

LeapFrog, founded more than two decades ago, helped pioneer the market for educational electronics, selling a range of tablets and other gadgets. But the company struggled to compete with technology companies such as Apple, as well as toy-industry rivals. A broader slump in the tablet market further squeezed the company, and its LeapTV video-gaming platform failed to catch on.

"They tried to beat the iPad -- you cannot do that," Larian said. "They need to focus the brand on its roots. The core is learning for children."

VTech has also been a big player in making tech gadgets for kids and competed directly with LeapFrog in several categories, including tablets.