Ariel Investments, a U.S. investment firm and major shareholder in Mattel, sent a letter to the toy maker's board urging the company to consider a sale as part of its turnaround effort. Reuters and the Wall Street Journal viewed the letter, which was authored by John Rogers, who is Chairman and Co-CEO of Ariel Investments.
Rogers wrote that "By our estimates, a strategic buyer would pay a significant premium to your current share price," and named possible buyers as entertainment companies and private-equity firms. He also wrote that Mattel's options ranged from a "divestiture of significant assets, a merger and/or an outright sale of the company." A Mattel spokesperson said, "We appreciate Ariel Investments' longstanding investment in Mattel and their continued engagement," and added, "Our Board of Directors and management team are committed to acting in the best interests of all shareholders and will consider the views expressed in Ariel Investments' letter, as well as the views of Mattel's other shareholders."
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Mattel's shares were trading at 15.75, down -0.31 or -1.90% at 10:37 AM EDT, and the stock was below the flatline in premarket trading, leaving it down 19% since the start of the year. The company released the 2023 film Barbie starring Margot Robbie and Ryan Gosling, and last week reports said Authentic Brands expressed interest in acquiring Mattel with a possible offer of about $6 billion. News of that interest pushed Mattel's share price up 20%.
A major shareholder is asking the board to explore sale routes and the company is publicly acknowledging the request while noting it will weigh shareholder views. Follow the story if Mattel's board pursues any of the options Rogers outlined, since such moves could change the stock's outlook for investors.
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