Mattel, the iconic toy manufacturer known for brands such as Barbie, Hot Wheels, and American Girl, has attracted takeover interest amid a period of leadership transition and declining stock performance, according to people familiar with the matter.
Authentic Brands Group (ABG), a prominent brand-licensing company, has reportedly made a private offer valuing Mattel shares at more than $20 each, implying a market capitalization of approximately $6 billion or higher. This is notably higher than Mattel’s recent trading levels. The toy maker’s shares have fallen by over 30% so far this year and closed at $12.66 on Wednesday, giving the company a market value near $3.6 billion. Following news of the approach, shares jumped by 19% to $15.04 on Thursday, marking their largest single-day percentage gain in more than seven years.
The takeover interest arrives as Mattel announced a change in leadership, naming Roger Lynch, the current CEO of Condé Nast and an existing member of Mattel’s board, as its new chief executive officer. Lynch is set to become chairman on Friday and assume the CEO role within the coming month, taking over from Ynon Kreiz, who is departing to become co-CEO of Paramount.
Sources caution that Mattel has not initiated a formal sale process, and there is no certainty that the company’s board will entertain Authentic Brands Group’s overture or that an agreement will be reached. The appointment of Lynch as CEO may present additional complexities as he assesses the company’s future direction. It remains possible that other potential buyers could emerge.
Mattel has faced challenges in broadening its revenue streams beyond traditional toys and expanding into entertainment content. The company’s stock peaked more than a decade ago, and it has been under increasing pressure from investors, including Southeastern Asset Management, to explore strategic options such as seeking private equity investment or a full sale.
Authentic Brands Group’s interest in Mattel aligns with its track record of acquiring and revitalizing established but undervalued consumer brands and intellectual property. The firm, led by billionaire founder Jamie Salter, has grown by acquiring labels such as Reebok and Champion. Earlier this year, ABG completed a roughly $1 billion deal to purchase the Lee apparel brand from Kontoor Brands, as well as a $1.4 billion transaction to take the fashion company Guess private.
As Mattel enters this critical juncture with a new CEO and potential acquisition interest, the industry will be closely watching the company’s strategic decisions and any developments in the possible sale process.