The emblem of US toy firm Mattel is seen on the 72nd toy truthful (Spielwarenmesse) in Nuremberg, southern Germany, on February 2, 2023.
Christof Stache | AFP | Getty Pictures
L Catterton, the non-public fairness agency backed by luxurious items big LVMH, has approached Mattel, the toy maker behind Barbie and Sizzling Wheels, with an acquisition provide, individuals conversant in the matter mentioned on Monday.
The transfer might immediate different potential suitors to contemplate bids for Mattel, together with rival Hasbro, which has change into conscious of L Catterton’s strategy and is discussing whether or not it must also submit a proposal, one of many sources mentioned. Hasbro and Mattel have held unsuccessful merger talks through the years.
The sources cautioned that there isn’t any certainty L Catterton’s strategy will push Mattel into exploring a sale and requested to not be recognized as a result of the matter is confidential.
A Mattel spokesperson mentioned the corporate doesn’t touch upon rumors or hypothesis. Hasbro additionally declined to remark, whereas L Catterton didn’t reply to a request for remark.
Mattel shares jumped 20% to $19.49 following the Reuters report of the strategy, giving the toy maker a market worth 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. Regardless of the business success and acclaim of the Barbie film launched final yr, its shares had misplaced 23% of their worth within the final 12 months, as traders fretted about Mattel’s profitability and dealing with of unprofitable toy franchises.
The El Segundo, California-based firm posted a smaller-than-expected loss for the primary quarter in April, helped by its tight leash on prices whereas it grapples with weak gross sales.
Activist investor Barington Capital in February referred to as on Mattel to pursue modifications, together with exploring choices for its Fisher-Worth and American Woman manufacturers and separating the roles of CEO and chairman.
L Catterton, which has $34 billion in belongings underneath administration, has made greater than 250 investments in client manufacturers since its launch in 1989, in accordance with its web site. In 2016, the agency partnered with LVMH and the household workplace of LVMH CEO Bernard Arnault, and offered a stake to them.
Hasbro has additionally taken steps to cut back bills.
The Play-Doh maker reported a smaller-than-expected drop in first-quarter gross sales in April and handily beat revenue estimates, helped by leaner inventories and regular digital gaming income.
Its shares have carried out higher than Mattel’s, down 9% within the final 12 months.
