Hasbro, Inc. (HAS) Reportedly Mulls Mattel Acquisition

Hasbro, Inc. (HAS) Reportedly Mulls Mattel Acquisition

El Segundo-based Mattel Inc. has reportedly received an acquisition offer from rival Hasbro Inc.

Hasbro has gapped open sharply higher this morning and is now up 5.16 at $96.61 on above average volume.

The Wall Street Journal first reported Hasbro's latest approach to Mattel.

The terms of any possible deal "couldn't be learned", the WSJ said, and it is not clear if the approach will move forward.

It is not the first time both companies have discussed a collaboration: both in 1996 and 2016, they briefly discussed a merger. In fact, of the top-five toy items or toy lines out on the market right now, none of them are Hasbro or Mattel. "Some analysts have suggested that any deal would be closely scrutinized by competition officials", he adds.

Two decades ago, Hasbro resisted a $5.2 billion purchase bid from Mattel.

Shares of Mattel, the maker of Barbie and Hot Wheels, jumped about 24 percent in after-hours trading.

"Mattel has struggled with slumping sales despite hiring a new chief executive early this year, Margo Georgiadis, a former Google executive", writes James F. Peltz for the Los Angeles Times. Monness Crespi & Hardt upped their target price on Mattel from $22.00 to $27.00 and gave the company a "buy" rating in a research report on Wednesday, October 11th. The company reported $0.70 earnings per share for the quarter, missing the Zacks' consensus estimate of $0.71 by $0.01.

"We believe its brands and manufacturing footprint could be worth more than $10 billion in their current state", write BMO Capital Markets' Gerrick Johnson in a note to clients. It could have long-term consequences for connected toys, too. The new company could become the world's largest toy company.

Or use its own Hollywood connections to make stars out of Barbie and friends.

The report comes just a few weeks after Mattel shocked the market with a profit warning, citing "Toys "R" Us filing for bankruptcy, tighter retailer inventory management and challenges with certain underperforming brands" as reasons for the poor performance in the third quarter.

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