Barbie-Maker Mattel Draws Takeover Interest From Authentic Brands Group
Shares in the toy maker rose 19% Thursday, after having shed more than a third this year
- Authentic Brands Group recently expressed takeover interest in Mattel, discussing an offer that could value the toy maker at $6 billion or more.
- Mattel named Condé Nast Chief Executive Roger Lynch as its next CEO on Wednesday, succeeding Ynon Kreiz.
- Mattel shares have dropped by more than 30% this year. The stock rose more than 4% on Thursday after The Wall Street Journal reported on the approach.
Barbie-maker Mattel MAT 18.80%increase; up pointing triangle, dealing with a sliding stock and now a chief-executive transition, recently attracted takeover interest from brand-licensing giant Authentic Brands Group, according to people familiar with the matter.
Authentic Brands Group has made an approach and been privately discussing an offer that could value Mattel at more than $20 a share, or around $6 billion or more, some of the people said.
Mattel shares had dropped by more than 30% this year and on Wednesday, the toy maker named Condé Nast Chief Executive Roger Lynch its next CEO. The shares fell again to close at $12.66, giving the company a market value of about $3.6 billion.
The stock rose 19% to $15.04 on Thursday, its biggest percentage gain in more than seven-and-a-half years, after The Wall Street Journal reported on the approach.
Lynch, who was already on the board, will become chairman on Friday and take over as CEO in the next month, the company said Wednesday. He succeeded Ynon Kreiz, who is leaving to become co-CEO of Paramount.
There is no guarantee Mattel will be receptive to Authentic’s approach or the two sides will reach a deal, the people cautioned. Another suitor for Mattel could also emerge, they said. Lynch’s pending appointment as new CEO could complicate any deal as he tries to figure out his strategy.
A formal sale process for Mattel isn’t currently under way, one of the people said.
The maker of Hot Wheels cars and American Girl dolls has been struggling to grow beyond just toys and into entertainment. Its shares peaked over a decade ago. Analysts who cover the company say many of Mattel’s brands—like Barbie—could be worth more alone than the value of the entire business.
Mattel has been under pressure from investors, notably Southeastern Asset Management, to raise funds from a private-equity investor or sell itself entirely.
Authentic’s interest in Mattel would fit with its strategy of buying up and reviving distressed brands and undervalued intellectual property. Its billionaire founder Jamie Salter built an empire by picking off labels such as Reebok and Champion.
In May, Authentic struck a roughly $1 billion deal with the apparel retailer Kontoor Brands to buy its Lee denim and casual-clothing business. It also struck a $1.4 billion deal to take private Guess, another jeans maker. Separately, it manages the likenesses of celebrities and athletes including Shaquille O’Neal and David Beckham.
Earlier this year, Authentic tapped the former CEO of casino operator Wynn Resorts, Matthew Maddox, to be its next leader.