• Authentic Brands has reportedly discussed a private offer of more than $20 a share, valuing Mattel at around $6 billion or more.
• The WSJ says there is no guarantee Mattel will accept the approach, while another suitor could emerge.
• Authentic’s strategy centers on acquiring and reviving distressed brands and undervalued intellectual property, with recent deals involving Lee and Guess.

Mattel Inc. (MAT) shares surged more than 23% on Thursday afternoon after the Barbie maker reportedly attracted takeover interest from brand-licensing giant Authentic Brands Group. 

Authentic has approached Mattel and privately discussed an offer that could value the company at more than $20 a share, or around $6 billion or more, according to The Wall Street Journal, citing people familiar with the matter.

The potential deal comes as Mattel deals with a sliding stock and an upcoming chief-executive transition.

Authentic Brands Eyes Mattel, Says WSJ

There is no guarantee Mattel will be receptive to Authentic’s approach or that the two sides will reach a deal, the WSJ reported. Another suitor could also emerge, according to people familiar with the matter.

A formal sale process for Mattel is not currently underway, one person told the Journal.

Authentic’s interest would fit with its strategy of buying and reviving distressed brands and undervalued intellectual property. Billionaire founder Jamie Salter built the company’s empire by acquiring labels including Reebok and Champion.

In May, Authentic struck a roughly $1 billion deal with apparel retailer Kontoor Brands to buy its Lee denim and casual-clothing business. It also agreed to a $1.4 billion deal to take private Guess, another jeans maker. Separately, Authentic manages the likenesses of celebrities and athletes, including Shaquille O’Neal and David Beckham, the WSJ report stated.

Mattel Faces Leadership Transition

Mattel has been dealing with a sliding stock and a chief-executive transition. On Wednesday, the company named Condé Nast Chief Executive Roger Lynch as its next CEO, sending shares down 4%.

Lynch, who was already on Mattel’s board, will become chairman on Friday, Oct. 2, and take over as CEO next month, the company said. He succeeds Ynon Kreiz, who is leaving to become co-CEO of Paramount.

Mattel Under Pressure To Unlock Value

The maker of Hot Wheels cars and American Girl dolls has been struggling to grow beyond toys and into entertainment. Mattel has also faced pressure from investors, notably Southeastern Asset Management, to raise funds from a private-equity investor or sell itself entirely, according to the WSJ report.

MAT Stock: Stocktwits Retail Sentiment

On Stocktwits, retail sentiment for MAT jumped to ‘extremely bullish’ from ‘bullish’ over the past 24 hours, while message volume improved to ‘extremely high’ from ‘high’ at the time of writing.

MAT shares have dropped nearly 24% year-to-date.

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