Mattel shares slip as investor urges strategic review
MAT•Mattel shares fell about 3% after Ariel Investments, which owns a 5.4% stake, urged the toymaker to explore strategic alternatives, including a sale, merger or major asset divestiture. Mattel said it would consider Ariel’s views while acting in the best interests of shareholders.
1. Ariel seeks strategic review
Ariel Investments said in a letter that Mattel’s shares remain significantly undervalued and that its portfolio could appeal to toy companies, entertainment companies and private equity firms. Mattel said it would consider the views expressed in the letter while acting in the best interests of all shareholders.
2. Takeover interest builds
Last week, Authentic Brands approached Mattel about a potential acquisition valuing the company at about $6 billion or more, a source familiar with the matter told Reuters. Mattel also attracted fresh takeover interest after announcing the departure of Chief Executive Yvon Kreiz. In May, investor Southeastern Asset Management urged Mattel to evaluate options including going private or a sale to Hasbro or a media company.
3. Pressure and valuation debate
Mattel has faced weakening toy demand and higher tariff-related costs in recent years. Annex Wealth Management’s Brian Jacobsen said investors would want evidence that the whole company is worth more than the sum of its parts. Mattel’s forward price-to-earnings multiple was 10.45, compared with 14.35 for Hasbro, according to data compiled by LSEG.
