Mattel is confident as 'standalone company' after report of acquisition offer

Following a news report that a private equity firm had approached Mattel with a buyout offer, the El Segundo-based toy company said it is “confident” in its ability to deliver profits as an independent, publicly traded company.

Reuters reported Monday that L Catterton, a firm backed by luxury goods giant LVMH, had made Mattel an acquisition offer. Catterton has $34 billion in assets under management and has made more than 250 investments in consumer brands.

A spokesperson for Mattel said the company would “not comment on speculation.” Reuters attributed the news of the offer to unnamed sources.

“We are very confident in Mattel’s strategy and our ability to create long-term shareholder value as a standalone company,” the spokesperson said.

A source familiar with the company’s operations, who requested anonymity to discuss the internal corporate matter, said there was no merit to the report of an acquisition offer.

Mattel’s shares were up 15% to $18.68 on Monday. In the first quarter of 2024, Bloomberg reported, Mattel posted a smaller-than-expected loss, in part thanks to sales of its Hot Wheels toy cars. For the second quarter, analysts predict sales will rise about 1%, according to Bloomberg.

Mattel got a popularity boost last year when a live-action film about the company’s iconic Barbie character set box-office records as it grossed more than $1.4 billion and became a cultural phenomenon. Chief Executive Ynon Kreiz has led the push into Hollywood, turning the company’s intellectual property into mainstream films.

Mattel Films, the company’s production arm, currently has 16 projects in development: J.J. Abrams is producing a Hot Wheels movie, Lily Collins and Lena Dunham signed on for Polly Pocket, and Vin Diesel lined up as a partner for Rock ’Em Sock ’Em Robots, among others.

Despite the Barbie boost and a successful push by Kreiz to bolster the company’s bottom line by reducing its workforce and the number of products it makes, Mattel’s stock has languished over the past year.

Its middling performance drew the ire of an activist investor, New York hedge fund Barington Capital Group, which in February called on the company to, among other things, sell two of its brands — the premium-priced American Girl dolls and its Fisher-Price line of young children’s toys.

Reuters reported that L Catterton’s approach could prompt other companies like rival Hasbro to make offers for the company. Hasbro and Mattel have had unsuccessful merger talks in the past.