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Hasbro reportedly offers to buy fellow toymaker Mattel

Hasbro reportedly offers to buy fellow toymaker Mattel

November 11th, 2017 by Associated Press in National News

Hasbro Inc. reportedly made an offer to buy beleaguered rival Mattel Inc.

Hasbro approached El Segundo, Calif.-based Mattel recently with a takeover offer but terms of the proposal were not available, the Wall Street Journal reported Friday, citing unidentified sources.

Representatives of Hasbro and Mattel declined comment on the report.

Hasbro, based in Pawtucket, R.I., makes toys such as Transformers, G.I. Joe figures, My Little Pony, Nerf and Play-Doh, and games including Monopoly, Scrabble and Twister. It also has rights to valuable entertainment franchises such as "Star Wars."

Mattel's brands include the Barbie doll, Hot Wheels and Matchbox cars, Fisher-Price toys and American Girl dolls.

Mattel has struggled with slumping sales despite hiring a new chief executive this year, Margo Georgiadis, a former Google executive.

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. It blamed some of the decline on the recent bankruptcy filing of retailer Toys R Us Inc.

That prompted S&P Global Ratings to lower its ratings on Mattel's corporate debt.

One analyst said Mattel might be better off as a takeover target.

"We believe its brands and manufacturing footprint could be worth more than $10 billion in their current state," Gerrick Johnson of BMO Capital Markets said in a note to clients. "Thus, the company could have value to a financial, industry or entertainment conglomerate buyer."

Mattel's market value is $5 billion after the stock plunged 47 percent so far this year. The stock rose 5 percent Friday to close at $14.62 a share.

Hasbro has a market value of $11.4 billion, and its stock is up nearly 18 percent this year. Hasbro closed at $91.45 a share, up 3 percent, Friday.

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

Hasbro contended at the time that a deal might be blocked by federal regulators on antitrust grounds, and Mattel abandoned its offer in early 1996.

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