Private equity firm L Catterton has approached U.S. toy maker Mattel (NASDAQ:MAT) with a buyout offer, according to a report from Reuters on Monday, citing people familiar with the matter said on Monday.
However, the publication cautioned that there is no certainty the private equity firm, which is backed by luxury goods giant LVMH, will be able to push Mattel into exploring a sale.
However, it could prompt other potential suitors to assess bids for Mattel, including rival Hasbro, which is said to have become aware of L Catterton's approach and is debating whether it should also submit an offer.
Reuters adds that Hasbro and Mattel have held unsuccessful merger talks over the years.
Mattel shares have surged more than 9% Monday following the news. Its shares are currently trading at around $18.75 apiece. The stock is down 0.64% in 2024 and has fallen more than 13% in the last 12 months.
Earlier this year, analysts at UBS reiterated a Buy rating on Mattel, noting that while its capital light approach to investing in content remains central in its strategy, they are "hearing a nuanced change in that approach of perhaps taking calculated risks with known franchises where Mattel thinks returns could be outsized."
"From small budget movies (or calculated participation in big budget films) or shows, to experiential/digital investments – Mattel is looking for ways to get a bigger share of the pie with proven brands," said UBS in March. "Management believes the overall content/IP potential of the portfolio is still untapped, and the company is still in the early innings of the transformation to become more IP-driven."