Authentic Brands Group has approached toy maker Mattel, with private discussions suggesting a bid that could exceed $20 per share, corresponding to a valuation of approximately $6 billion or higher. According to insiders, there is no guarantee of a deal, no formal sale process is currently underway, and other bidders may emerge.

Mattel's brands include Barbie, Hot Wheels, Fisher-Price, American Girl, UNO, Mega Bloks, Thomas & Friends, Matchbox, and Magic 8-Ball. The company has been attempting to extend its toy business into entertainment, but growth has not been smooth. Authentic's interest is described by those familiar with the discussions as preliminary, with the logic being that they want child-oriented entertainment intellectual property rather than just acquiring factories.

The timing coincides with a leadership change. Current CEO Ynon Kreiz will step down to become co-CEO of Paramount Skydance and oversee the merged business with Warner Bros. Board member Roger Lynch will take over as chairman on Friday and assume the CEO role before November 2. He previously led Condé Nast. Reports indicate that the new leader is still formulating their strategy, which could complicate the deal.

The stock price has already reflected the bid. Mattel's shares fell over 30% earlier this year, closing at $12.66 on Wednesday, giving it a market value of about $3.6 billion. Following the news, shares rose about 19% on Thursday to $25, reaching $15.79 during the day, marking one of the largest single-day increases in over seven and a half years. A bid above $20 represents about a 58% premium over Wednesday's closing price. Mattel declined to comment on market rumors, while Authentic did not immediately respond to requests for comment.

Authentic, founded by Jamie Salter, focuses on acquiring undervalued or distressed brands and then licensing them rather than operating all retail themselves. Its acquisitions include Reebok and Champion. In May, it purchased Kontoor's Lee jeans and casual wear business for about $1 billion. If the deal with Mattel goes through, it would mark a shift from acquiring clothing trademarks to toys and film characters.

The buyer is a brand aggregator focused on licensing, while the seller is a toy company with a market value of about $3.6 billion that is undergoing a leadership change. This is an event-driven equity repricing, not a rebound in toy demand. Beneficiaries are Mattel shareholders priced at over $20, while those under pressure include other toy companies still engaged in manufacturing and retail, as well as buyers valuing Mattel as an independent content studio. American families are facing higher fuel costs and interest rates, leading to weak toy spending.

The $6 billion figure is a valuation under discussion, not a signed price. No formal process has been initiated.

Source: Public Information