The logo of US toy company Mattel is seen at the 72nd toy fair (Spielwarenmesse) in Nuremberg, southern Germany, on February 2, 2023.
Christof Stache | AFP | Getty Images
L Catterton, the private equity firm backed by luxury giant LVMH, has approached MattelThe toymaker behind the Barbie and Hot Wheels brands has made a takeover offer, people with knowledge of the matter said on Monday.
The move could prompt other potential suitors to consider bidding for Mattel, including rival Hasbrohas learned of L Catterton’s approach and is discussing whether to submit an offer, one of the sources said. Hasbro and Mattel have had unsuccessful merger talks for years.
The sources cautioned that there was no certainty that L Catterton’s approach would prompt Mattel to explore a sale of the company, asking not to be named because the matter is confidential.
A Mattel spokesperson said the company does not comment on rumors or speculation. Hasbro also declined to comment, while L Catterton did not respond to a request for comment.
Mattel shares rose 20% to $19.49 after Reuters reported the approach, giving the toymaker a market value of $6.5 billion. Hasbro shares rose 4% to $61.25.
Mattel has turned to media partnerships to offset sluggish demand for its toys. Despite the commercial success and critical acclaim of the Barbie movie released last year, the company’s stock has lost 23% of its value over the past 12 months as investors worry about Mattel’s profitability and how it handles its unprofitable toy brands.
The El Segundo, California-based company posted a smaller-than-expected loss in the first quarter in April, thanks to tight cost controls while struggling with weak sales.
In February, activist investor Barington Capital called on Mattel to make changes, including exploring options for the 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, selling them a stake.
Hasbro has also taken steps to cut costs.
The maker of Play-Doh reported a smaller-than-expected fall in first-quarter sales in April and beat profit estimates, helped by lower inventory and steady digital game revenue.
The company’s stock has outperformed Mattel, falling 9% over the past 12 months.
