Roger Lynch named Mattel CEO as Authentic pursuit surfaces
Authentic Brands Group has expressed takeover interest in Mattel, discussing an offer that could value the toy maker at more than $20 a share, or around $6 billion or more, according to people familiar with the matter.
The approach was reported by The Wall Street Journal on Thursday, a day after Mattel named Condé Nast Chief Executive Roger Lynch its next CEO. Lynch, who was already on Mattel’s board, will become chairman on Friday and take over as CEO in the next month, the company said. He succeeds Ynon Kreiz, who is leaving to become co-CEO of Paramount.
There is no guarantee Mattel will be receptive to Authentic’s approach or that the two sides will reach a deal, the people cautioned. Another suitor for Mattel could also emerge, they said. A formal sale process for Mattel is not currently under way, one of the people said. Lynch’s pending appointment could complicate any deal as he works through his strategy for the company.
Mattel shares have dropped more than 30% this year. The stock fell again on Wednesday to close at $12.66, giving the company a market value of about $3.6 billion. The shares rose more than 4% on Thursday after the WSJ reported on Authentic’s approach.
The maker of Hot Wheels cars and American Girl dolls has been struggling to grow beyond toys and into entertainment. Its shares peaked more than a decade ago. Analysts who cover the company say many of Mattel’s brands — including Barbie — could be worth more alone than the value of the entire business.
Mattel has been under pressure from investors, notably Southeastern Asset Management, to raise funds from a private-equity investor or sell itself entirely.
Authentic’s interest in Mattel would fit with its strategy of buying up and reviving distressed brands and undervalued intellectual property. Its billionaire founder Jamie Salter built an empire by picking off labels such as 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 struck 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.
Earlier this year, Authentic tapped the former CEO of casino operator Wynn Resorts, Matthew Maddox, to be its next leader.