💙 🔷 Not impressed by Big Tech in Q3? Explore these Blue Chip Bargains insteadUnlock them all

Exclusive-Buyout firm L Catterton approaches Mattel with acquisition offer, sources say

Published 07/22/2024, 11:29 AM
Updated 07/22/2024, 01:57 PM
© Reuters. FILE PHOTO: The Mattel booth on the convention floor at Comic-Con International in San Diego, California, U.S., July 21, 2022. REUTERS/Bing Guan/File Photo
MAT
-
HAS
-

By Anirban Sen

NEW YORK (Reuters) -L Catterton, the private equity firm backed by luxury goods giant LVMH, has approached Mattel (NASDAQ:MAT), the toy maker behind Barbie and Hot Wheels, with an acquisition offer, people familiar with the matter said on Monday.

The move could prompt other potential suitors to consider bids for Mattel, including rival Hasbro (NASDAQ:HAS), which has become aware of L Catterton's approach and is discussing whether it should also submit an offer, one of the sources said. Hasbro and Mattel have held unsuccessful merger talks over the years.

The sources cautioned that there is no certainty L Catterton's approach will push Mattel into exploring a sale and asked not to be identified because the matter is confidential.

A Mattel spokesperson said the company does not comment on speculation. "We are very confident in Mattel's strategy and our ability to create long-term shareholder value as a standalone company," the spokesperson said.

Hasbro declined to comment, while L Catterton did not respond to a request for comment.

Mattel shares jumped 20% to $19.49 following the Reuters report of the approach, giving the toy maker a market value of $6.5 billion. Hasbro shares rose 4% to $61.25.

Mattel has been turning to media partnerships to offset tepid demand for its toys. Despite the commercial success and acclaim of the Barbie movie released last year, its shares had lost 23% of their value in the last 12 months, as investors fretted about Mattel's profitability and handling of unprofitable toy franchises.

The El Segundo, California-based company posted a smaller-than-expected loss for the first quarter in April, helped by its tight leash on costs while it grapples with weak sales.

Activist investor Barington Capital in February called on Mattel to pursue changes, including exploring options for its Fisher-Price and American Girl brands and separating the roles of CEO and chairman.

L Catterton, which has $34 billion in assets under management, has made more than 250 investments in consumer brands since its launch in 1989, according to its website. In 2016, the firm partnered with LVMH and the family office of LVMH CEO Bernard Arnault, and sold a stake to them.

Hasbro has also taken steps to reduce expenses.

The Play-Doh maker reported a smaller-than-expected drop in first-quarter sales in April and handily beat profit estimates, helped by leaner inventories and steady digital gaming revenue.

© Reuters. FILE PHOTO: The Mattel company logo is pictured at the entrance of the Montoi plant in the municipality of Escobedo, Mexico March 15, 2022. REUTERS/Daniel Becerril/File Photo

Last year, Hasbro agreed to sell its eOne film and TV studio to Lions Gate Entertainment for about $500 million as part of its push to focus on more profitable brands. Hasbro's shares have performed better than Mattel's, down 9% in the last 12 months.

Mattel and Hasbro reached a partnership agreement last year to create co-branded toys and games from some of their most popular brands, including Barbie-branded Monopoly games and Transformers-branded UNO games. Analysts have said a merger between the two companies could unlock a lot of value but also face major antitrust obstacles.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.