Mattel CEO may put deal-making as priority Uno
MAT•Incoming Mattel CEO Roger Lynch faces calls from shareholder Ariel Investments to consider a sale, as Authentic Brands is reportedly eyeing a takeover worth more than $7 billion. At a mooted $20 per share, a sale could imply a 15% annualized return for Authentic under the article’s assumptions.
1. Pressure to consider a sale
Ariel Investments, which owns roughly 5% of Mattel, has urged management to consider a sale. The report says Authentic Brands is reportedly eyeing a takeover worth more than $7 billion. Lynch, named chairman and CEO on September 30, is due to make his case for keeping Mattel public.
2. Turnaround challenges
Mattel’s revenue has stagnated as tariffs and inflation drive up costs, and the potential of further partnerships following the “Barbie” movie has not materialized. Mattel’s shareholder return has lagged Hasbro’s for much of the past decade.
3. Buyout and valuation estimates
The article estimates that a $20-per-share buyout would value Mattel’s enterprise at $7.5 billion. Under its assumptions—including 40% debt financing, 2% sales growth and a two-percentage-point increase in EBITDA margin to 17% over five years—the deal could produce a 15% annualized return before fees. It also estimates Mattel shares could reach around $21 if the company meets analysts’ forecasts and investors value it at Hasbro’s price-to-earnings multiple.
