Hasbro has offered to acquire Mattel

Screen Shot 2017 11 10

Its "shares are set to open at a three-month high Monday after a 22% surge in pre-market trading that followed multiple media reports of a takeover approach", writes Martin Baccardax for The Street. The terms of any possible deal couldn't be learned, and the approach may go nowhere.

It is not the first time both companies have discussed a collaboration: both in 1996 and 2016, they briefly discussed a merger.

Mattel has not been the only target of Hasbro, which is trying to diversify its revenue stream. Historically, such a tie-up would either have been viewed as a merger of equals, or Mattel would have been the suitor, which would be the case had discussions been taking place a decade ago. "Mr. Potato Head would be under the same roof as Barbie", writes Chris Woodyard for USA Today. Mattel's market value is around 5 billion dollars (4.3 billion euro), but the company has already lost 47 % in value this year alone, despite properties like Barbie and Hot Wheels. BidaskClub downgraded shares of Mattel from a "hold" rating to a "sell" rating in a report on Saturday, August 5th.

Mattel in late October reported a 14 percent drop in its third-quarter sales, excluding the effect of currency fluctuations, and suspended its quarterly dividend. The company reported $0.70 earnings per share for the quarter, missing the Zacks' consensus estimate of $0.71 by $0.01. Additional brands including He-Man and Polly Pocket could add more than US$2 billion to the toymaker's value. It could have long-term consequences for connected toys, too. Capital World Investors now owns 1,559,700 shares of the company's stock valued at $33,580,000 after acquiring an additional 1,090,000 shares during the period.

The news comes a week after it was announced Hasbro has teamed with Paramount Pictures to produce and distribute content based on Hasbro brands, as well as original stories.

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.

Indeed, "Hasbro has bet heavily on Hollywood's cachet, striking licensing deals with Disney for popular princesses and Frozenmerchandise", Dawn C. Chmielewski writes for Deadline Hollywood.

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