Thursday, 23 November, 2017

Mattel shares soar on report of Hasbro takeover offer

Screen Shot 2017 11 10 Google Finance
Jo Caldwell | 13 November, 2017, 00:23

Representatives of Hasbro and Mattel declined comment on the report. Mattel's toys include Barbie and Hot Wheels.

Talks that the two may join forces has been long rumored, as Mattel's stock has fallen a significant 52 percent over the past year, leaving its market value at $5 billion.

Hasbro's approach to Mattel was made recently, one of the people said.

Hasbro approached El Segundo, Calif. -based Mattel recently with a takeover offer but terms of the proposal were not available, The Wall Street Journal reported Friday, citing unidentified sources.

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Hasbro, based in Pawtucket, R.I., makes toys such as Transformers, G.I. Joe figures, My Little Pony, Nerf and Play-Doh, and games including Monopoly, Scrabble and Twister.

Two weeks back, Mattel suspended its dividend and Chief Executive Margo Georgiadis, who took the job in January, warned the company would miss its full-year revenue forecast. Hasbro Inc. shares rose $2.55, or 2.8 percent, to $94. But Mattel's shares are down by almost half this year alone - an appealing discount for Hasbro.

With a market cap around $11 billion, Hasbro is approximately twice the size of Mattel's $5 billion.

"Both companies would benefit from a merger, but Mattel stockholders might oppose a deal that values the company on its depressed stock price", said Erik Gordon, a professor at the University of Michigan's Ross School of Business.

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