Barbie maker, Mattel’s shares jumped by nearly 20% after reports stated that its toy making rival, Hasbro was considering a takeover.
The two companies are ranked among the world’s biggest toymakers. Mattel is famed internationally for being the creator of the iconic children’s toy, Barbie. Hasbro, on the other hand, has a number of international icons to its name, including the putty like toy, Play Doh, and the My Little Pony franchise. The companies also have a history of takeovers with Mattel attempting to capture Hasbro in 1996.
The shares for both brands rose after news of the potential takeover trickled through. Hasbro’s sales were almost 6% higher in New York, while Mattel reported an increase closer to 20%.
The increase comes as a welcome respite after shares for both companies took a serious dip in October. The dip in shares was attributed to a sudden issue with the popular children’s store, Toys R Us. The store reported bankruptcy in October, which consequently resulted in loss of sales for the companies.
Over the past year, the companies have been struggling to maintain their stronghold in the toy market. Mattel, valued at $6bn, is a remarkably smaller firm after the past financial year. The company reported that its shares lost nearly half of its value in the past fiscal year. As of Monday, November 13, Mattel is trading shares at $17.68.
However, Hasbro has managed to hold its head above the tide. The company reported that its share values were nearly $10 higher than the past year. The company now holds a market value almost double that of Mattel.
Mattel’s dip in share price could make it the perfect takeover decision for Hasbro. The company would then have monopoly on most of the toy market. However, analysts believe that the dip may be the exact reason why Hasbro may be hesitant to invest in Mattel.
However, there can be no denying that Mattel would bring a number of franchises to the table. Apart from its Barbie brand, Mattel also owns Fisher-Price, American Girl, and Hot Wheels. These brands, combined with Hasbro’s own, could result in the birth of a mega toymaker.