Mattel CEO may put deal-making as priority Uno
MAT•Mattel’s incoming CEO Roger Lynch faces calls from shareholder Ariel Investments to consider a sale as the toymaker’s revenue has stagnated. Authentic Brands is reportedly eyeing a takeover worth more than $7 billion.
1. Calls for a sale
Ariel Investments, which owns roughly 5% of Mattel, has urged management to consider a sale. Authentic Brands is reportedly eyeing a takeover worth more than $7 billion. Incoming CEO Roger Lynch has said he deserves a chance to make his case for keeping the company public.
2. Challenges and deal math
Mattel’s revenue has stagnated as tariffs and inflation drive up costs, and its shareholder return has lagged Hasbro for much of the past decade. A potential $20-per-share buyout would value Mattel’s enterprise at $7.5 billion. Under the article’s assumptions, including 40% debt financing and a 17% EBITDA margin after five years, a resale at the same multiple would imply a 15% annualized return before fees.
3. Hasbro comparison
Hasbro’s mobile Monopoly game, managed by an outside partner, generated $168 million last year, while sales of Magic: The Gathering rose 59%. Mattel trades at 10 times expected fiscal 2027 earnings, compared with 14 times for Hasbro. Even if Mattel meets analysts’ forecasts and earns Hasbro’s price-to-earnings multiple, the article estimates its shares would reach around $21.
