Toy Magnate Considers Hostile Moves to Merge With Uninterested Mattel
MGA Entertainment wants to merge with rival Mattel, even if it means going hostile.
(Bloomberg) -- MGA Entertainment Inc. wants to merge with rival Mattel Inc., even if it means going hostile.
Isaac Larian, chief executive officer of closely held MGA, said he’s “looking at other options” to merge the creator of Bratz dolls with the maker of Barbie dolls after his earlier unsolicited offers were rejected.
MGA, whose properties also include Little Tikes and L.O.L. Surprise!, most recently approached Mattel about his interest in May, citing the company’s rising debt and tumbling share price as an impetus for a deal. Mattel rejected the proposal -- which didn’t include any kind of price -- according to an email exchange reviewed by Bloomberg News. Mattel declined to comment on the exchange.
“I try to do things in a peaceful manner, very confidentially, and you saw what the response was, so there are other options available to take over a company for the sake of shareholders, and we are looking into different ways,” said Larian, who said he’s a Mattel shareholder but declined to specify his stake. He also declined to elaborate on what his next steps are in his bid. “I’m looking at other options, frankly, because I don’t think the board is looking to do what’s right for Mattel shareholders.”
In a separate email, he said that “Mattel will never turn around under the current board and management.”
His overture comes as Mattel tries to implement a turnaround, and there are early signs it’s gaining speed. Although it has faced formidable obstacles in recent years, including the loss of major customer Toys “R” Us Inc., Mattel has been making strides after naming its fourth chief executive officer in four years.
Ynon Kreiz took the helm last spring, quickly launching a film division in a bid to transform the toymaker into a Hollywood force like rivals Hasbro Inc. and Lego A/S. First-quarter results topped estimate, though sell-side analysts have voiced concern that it remains too early to pop the champagne.
Mattel’s shares rose as much as 12% after the close of regular trading Tuesday in New York. The L.A. Times reported on the merger offer earlier.
MGA has been interested in merging with rival Mattel for some time, despite their complicated history. According to Larian, who’d like to run Mattel if his bid were successful, he approached the company in 2015 and again in 2018 about his interest in a potential merger and was shot down.
To contact the reporter on this story: Joe Deaux in New York at jdeaux@bloomberg.net
To contact the editors responsible for this story: Anne Riley Moffat at ariley17@bloomberg.net, Michael Hytha
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