Mattel Inc. (NYSE: MAT)


Hasbro Inc (HAS.O) has made an approach to acquire rival Mattel Inc (MAT.O), the latest attempt to combine the two biggest U.S. toymakers in more than two decades.

A deal would create a toy powerhouse, uniting Hasbro's My Little Pony, Monopoly and Nerf brands with Mattel's Barbie dolls and Hot Wheels toys. A combined company would have more pricing power to negotiate with entertainment studios over TV and movie franchises.

Mattel's stance towards Hasbro in this overture is not clear, and it remains far from certain that a deal will materialise, the source said, asking not to be identified because the matter is confidential.

Shares of Mattel jumped about 24 percent in after-hours trading. Hasbro shares rose about 3.3 percent.

Hasbro has a market value of about $11 billion (8.34 billion pounds) after a near 18 percent increase in its stock price so far in 2017. Mattel's shares have slumped 47 percent this year, valuing the company at $4.8 billion and making it more vulnerable as a takeover target.

The September bankruptcy of Toys "R" Us, the biggest U.S. toy retailer, highlighted the struggles facing the sector, including online competition and children's shifting preference for electronics over traditional toys.

Mattel has pointed to that bankruptcy as a reason for weak sales.

Two weeks ago, Mattel suspended its dividend and Chief Executive Margo Georgiadis, who took the job in January, warned the company would miss its full-year revenue forecast. Mattel's stock fell to its lowest level since 2009 that day.

Hasbro and Mattel have had talks several times over the years, including in 1996 and again sometime in late 2015.

In 2014, Hasbro held merger discussions with DreamWorks Animation SKG Inc, the studio behind "Shrek," but DreamWorks was subsequently bought by Comcast Corp (CMCSA.O).

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