Mattel (MAT) shares soared over 15% on Monday, nearly erasing year-to-date losses, following reports of an acquisition offer from L Catterton, a private equity firm backed by French luxury conglomerate Moët Hennessy Louis Vuitton SE (LVMH).
While Mattel, known for its Barbie and Hot Wheels brands, is not actively seeking a sale, L Catterton’s bid could attract interest from other potential buyers, according to sources familiar with the matter cited by Reuters. Mattel has not yet commented on the report.
Potential for Additional Offers Amid Activist Investor Pressure
The interest from L Catterton might prompt similar offers from companies such as competitor Hasbro (HAS), which has previously engaged in merger discussions with Mattel.
This acquisition offer comes at a time when Mattel is under pressure from activist investors to restructure and enhance performance. Earlier this year, Barington Capital urged Mattel to explore strategic alternatives for its Fisher-Price and American Girl brands.
Barington CEO James Mitarotonda highlighted in a February letter the prolonged decline of Fisher-Price and American Girl, suggesting Mattel might not be the optimal owner for these brands. “We believe that these brands are now detracting from the success at Mattel’s other segments, and hurting shareholder value,” Mitarotonda stated.
Upcoming Financial Results and Future Plans
Mattel is scheduled to report its second-quarter results on Tuesday after the market closes, where it is expected to provide more insights into its future strategies following a reduction in losses in the first quarter.
