On 06/12/19 [09:51], Rumor Hound alerted a potential takeover of Mattel (NasdaqGSM: MAT; 11.40) by Hasbro (NasdaqGSM: HAS; 105.84). Rumor is substantiated by 48 sources; 12 of which have five-star reliability scores and 17 with source popularity scores 6 or greater. MAT shares were up 7%+ as of noon Wednesday on reports of a rejected & unsolicited merger offer by rival toymaker MGA Entertainment- who was subject of a lawsuit in 2004 by MAT. This follows a previous offer by MGA for MAT in May 2018- which the board rejected as it was deemed not in line with shareholders after careful consideration. MAT struggled in 2018, losing $1.1B in revenue y-o-y (2018 rev totaling $4.9B vs. 2019 consensus of $4.4B). RumorHound identified HAS as potential acquirer following this renewed merger bid- which may be warranted given the accretive nature of this transaction for HAS.
Hasbro totes mediocre financials, with an enterprise value of $11.4B, EDITDA of $83.9M, $1.9B short and LT debt, and a shareholder composition that is highly institutional (93% of outstanding). Comparatively, Mattel’s enterprise value of $7.3B, EBITDA of $(68.5)M, and $3.2B short and LT debt. Mattel acquisition could be accretive for Hasbro, who has a cash stockpile of $1.2B- suggesting a healthy financial position following several years of sustained revenue growth of the combined entity.
Currently, both companies leverage their IP to create movies and TV shows, such as Star Wars (HAS)- while Hasbro has maintained their long-standing franchises Monopoly, G.I. Joe, Furby, Transformers, Nerf, My Little Pony, Twister, and Power Rangers- a slight departure from traditional toy making heritage- but, a pivot exhibiting their adaptability to a changing customer and market with higher barriers to entry. Mattel produces Fisher-Price, Barbie, Monster High, Ever After High, Polly Pocket, Hot Wheels and Matchbox, Masters of the Universe, American Girl, board games, and WWE. Together, the combined entity could be a global leader in entertainment and toys.
Mattel (NASDAQ: MAT) is a leading global children’s entertainment company that specializes in design and production of quality toys and consumer products. We create innovative products and experiences that inspire, entertain and develop children through play. We engage consumers through our portfolio of iconic franchises, including Barbie®, Hot Wheels®, American Girl®, Fisher-Price®, Thomas & Friends® and Mega®, as well as other popular brands that we own or license in partnership with global entertainment companies. Our offerings include film and television content, gaming, music and live events. We operate in 40 locations and sell products in more than 150 countries in collaboration with the world’s leading retail and technology companies. Since its founding in 1945, Mattel is proud to be a trusted partner in exploring the wonder of childhood and empowering kids to reach their full potential. Visit us online at www.mattel.com.
Hasbro (NASDAQ: HAS) is a global play and entertainment company committed to Creating the World's Best Play Experiences. From toys and games to television, movies, digital gaming and consumer products, Hasbro offers a variety of ways for audiences to experience its iconic brands, including NERF, MY LITTLE PONY, TRANSFORMERS, PLAY-DOH, MONOPOLY, BABY ALIVE and MAGIC: THE GATHERING, as well as premier partner brands. Through its entertainment labels, Allspark Pictures and Allspark Animation, the Company is building its brands globally through great storytelling and content on all screens. Hasbro is committed to making the world a better place for children and their families through corporate social responsibility and philanthropy. Hasbro ranked No. 13 on the 2019 100 Best Corporate Citizens list by CR Magazine, and has been named one of the World’s Most Ethical Companies® by Ethisphere Institute for the past eight years. Learn more at www.hasbro.com, and follow us on Twitter (@Hasbro) and Instagram (@Hasbro).