American company Authentic Brands Group, which specializes in the acquisition, ownership, and management of brands, is interested in taking over toy manufacturer Mattel. This was reported by the Wall Street Journal (WSJ), citing informed sources.
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Barbie Doll Manufacturer Faces $6 Billion Takeover Bid; Mattel Also Changes CEO
According to sources, Authentic Brands Group has approached Mattel and is discussing a takeover offer that could amount to more than $20 per share. This would value the entire company at approximately six billion USD. Mattel, primarily known for its Barbie dolls, announced on Wednesday that Roger Lynch, the current CEO of magazine publisher Condé Nast, will become its new CEO starting in November. He will replace Ynon Kreiz, who is departing for Paramount.
Mattel is grappling with a decline in its stock price, which has fallen by almost seven percent since the beginning of the year. Following the news, however, they strengthened and are trading above $13. The company’s market capitalization is thus nearly $3.8 billion. According to sources, it is not yet certain that Mattel will be receptive to Authentic’s offer or that both parties will reach an agreement. Another potential suitor for Mattel could also emerge. The appointment of Lynch as the new CEO could also complicate a deal, as he will seek to outline a new strategy.
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Barbie or Hot Wheels are Worth More Than Mattel Itself. Why Is Authentic Brands Interested?
Mattel is trying to expand beyond just toys into the entertainment sector. The company’s shares reached their peak more than ten years ago. Analysts covering the company claim that many of Mattel’s brands, such as Barbie, could by themselves be worth more than the entire company. Other brands include Hot Wheels, American Girl, and Fisher-Price.
Authentic Brands Group’s interest in Mattel fits into its strategy of acquiring well-known but troubled or undervalued brands and redeveloping their intellectual property. Company founder Jamie Salter built its portfolio, among other things, by acquiring the Reebok and Champion brands. This May, Authentic agreed with Kontoor Brands to purchase its Lee apparel brand for approximately one billion USD. It also concluded an agreement to acquire Guess for 1.4 billion USD. In addition to fashion brands, it also manages the rights to the likenesses of several famous personalities and athletes, including basketball player Shaquille O’Neal and soccer player David Beckham.
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Source: Reuters
