Mattel stock soars on report of Hasbro takeover offer

Mattel Barbie store

Hasbro and Mattel said that they temporarily reduced shipments to the toy store operator ahead of the bankruptcy filing, but said they were working with the retailer to get their toys on its shelves during the holiday season. (HAS) was looking to take over the rival toymaker.

Hasbro Inc. has made a takeover offer for rival Mattel Inc., according to people familiar with the matter, a potential combination that would unite the two biggest USA toy makers and put Barbie and G.I. Joe under the same roof. The institutional investor owned 151,295 shares of the company's stock after selling 7,749 shares during the quarter.

Shares in Mattel have lost almost half their value this year and it has a market value of $5 billion, less than half that of Hasbro.

The Wall Street Journal reported that the offer had been made, based on "people familiar with the matter" who were not named.

The two companies are among the world's biggest toy makers.

Mattel has not been the only target of Hasbro, which is trying to diversify its revenue stream.

Bottom line: These are two companies moving in opposite directions, as Hasbro shares are up around 13% this year while Mattel was off 47% before news of a possible sale.

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

Mattel in late October reported a 14 percent drop in its third-quarter sales, excluding the effect of currency fluctuations, and suspended its quarterly dividend. The company has a market capitalization of $5,025.33, a P/E ratio of 97.47, a P/E/G ratio of 37.59 and a beta of 0.88.

"If a deal did go ahead, it would reflect the tech industry's increasingly firm grip on kids' free time".

Hasbro shares also got a little bit of a bounce. It could have long-term consequences for connected toys, too.

"This month, Hasbro announced that it had sealed an exclusive deal with Paramount Pictures to collaborate on producing films based on Hasbro brands".

Indeed, "Hasbro has bet heavily on Hollywood's cachet, striking licensing deals with Disney for popular princesses and Frozenmerchandise", Dawn C. Chmielewski writes for Deadline Hollywood.

Related News: