Mattel surges on Hasbro’s acquisition

By BLOOMBERG

NEW YORK • Mattel Inc gained as much as 24% on a report that Hasbro Inc has discussed an acquisition, a deal that would unite the two largest US toymakers.

The Wall Street Journal reported last Friday that Hasbro made a recent takeover approach, but the terms of a potential deal weren’t clear. The report sent Mattel’s shares as high as US$18.10 (RM75.84) in late trading. Mattel had been down 47% this year through last Friday’s close.

Mattel takeover speculation surged last month after an analyst suggested that the company may be better off as an acquisition target. The merger talk followed a surprisingly sharp sales decline at Mattel last quarter. The toy company, which makes Barbie and Fisher-Price, suspended its dividend and escalated a cost-cutting push to cope with the slump.

Mattel, based in El Segundo, California, also blamed the bankruptcy of Toys “R” Us Inc for hurting sales, especially in North America.

Mat tel and Hasbro declined to comment on the possible merger talks.

Bloomberg reported last year that Mattel and Hasbro have held merger discussions.

The companies have held on-and-offagain talks about a deal, people familiar with the situation said at the time.

Since then, Mattel’s condition has worsened, making it a cheaper possible target. Mattel had a market valuation of about US$5 billion at last Friday’s close, compared to more than US$11 billion for Pawtucket, Rhode Islandbased Hasbro.

A deal would amass a trove of household names, teaming up Mattel’s Hot Wheels and American Girl dolls with Hasbro’s Nerf and Monopoly.

Mattel has been pursuing a comeback plan under a new CEO, Margo Georgiadis, who previously worked at Google Inc. The company is still reeling from the loss of its Disney Princess franchise to Hasbro in 2016. And sales of Barbie dolls, Mattel’s biggest product, have been uneven.

Mattel also has been talking to its banking partners about alternative forms of financing, including an asset-backed loan.

The company has US$250 million in bonds maturing in March.