Authentic Brands Group Pursues Takeover of Mattel (MAT) Above $20 Per Share

TLDR

• Shares of Mattel climbed 19% Thursday, finishing at $15.04, the highest closing price since March.
• Reports indicate Authentic Brands Group has initiated discussions about acquiring the toy company.
• The potential acquisition could price Mattel shares above $20 each, totaling approximately $6 billion.
• According to a CNBC source, negotiations remain in preliminary phases.
• The acquisition interest follows Wednesday’s announcement that Roger Lynch will become Mattel’s new CEO.

Mattel shares experienced a dramatic rally Thursday, climbing 19% to close at $15.04 following reports that Authentic Brands Group is exploring an acquisition of the iconic toy company. The closing price marked Mattel’s strongest finish since March 13.

Mattel, Inc., MAT

Intraday trading saw shares peak at $17.23, representing the highest level since February’s final days.

According to a Wall Street Journal report citing sources with knowledge of the situation, Authentic Brands has held private conversations regarding a potential bid that would price Mattel shares north of $20.

Such a valuation would translate to approximately $6 billion for the company behind beloved franchises like Barbie and Hot Wheels.

Authentic Brands operates as a licensing and entertainment enterprise, managing a diverse portfolio spanning fashion labels, celebrity brands, and media properties.

Preliminary Discussions Underway

An individual with direct knowledge of the negotiations told CNBC that discussions are indeed taking place. However, they emphasized that talks remain in their earliest stages.

Speaking anonymously due to the confidential nature of the discussions, the source noted that Authentic’s pursuit aligns with its strategic focus on acquiring entertainment brands targeting younger audiences.

When contacted for comment, a Mattel representative stated the company maintains a policy of not addressing market speculation or unconfirmed reports.

Authentic Brands similarly chose not to provide a statement.

New Executive Leadership Announced

The acquisition speculation comes on the heels of Wednesday’s announcement regarding Mattel’s executive transition. The company revealed that Roger Lynch, currently leading Condé Nast, will assume leadership roles.

Lynch brings familiarity with the organization, having served as a Mattel board member since 2018. His appointment includes becoming chairman effective October 2, followed by the CEO position beginning November 2.

Lynch will succeed Ynon Kreiz, who is departing to assume co-CEO responsibilities at both Paramount and Warner Bros. Discovery in a significant career move.

The market’s initial response to Lynch’s appointment was notably negative, with shares dropping 4% Wednesday. However, Thursday’s buyout speculation completely reversed investor sentiment.

The toy manufacturer has faced headwinds recently, with the stock declining throughout much of the preceding twelve months prior to this week’s surge.

Thursday’s rally brought shares back to territory last visited during early spring. Friday’s premarket activity indicated modest additional gains.

At this stage, the potential transaction remains unconfirmed speculation. Neither party has formally announced or confirmed any agreement.