Mattel stock soars on report of Hasbro takeover offer

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Mattel, Inc. (NASDAQ: MAT) rose, following the Wall Street Journal report of approach from Hasbro, Inc. Vetr raised Mattel from a "buy" rating to a "strong-buy" rating and set a $41.14 price target on the stock in a research report on Monday, August 29th.

With all that said, it's important for investors to remember, in situations like these, that speculating on shares of Hasbro or Mattel at this time is just that: speculation.

It is not the first time both companies have discussed a collaboration: both in 1996 and 2016, they briefly discussed a merger.

Shares of Mattel, the maker of Barbie and Hot Wheels, jumped about 24 percent in after-hours trading. LEGO obtained the title of "largest toy maker in the world" from Mattel earlier this year, thanks to its 5.1 billion euro turnover.

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Mattel has pointed to that bankruptcy as a reason for weak sales. Monness Crespi & Hardt upped their target price on Mattel from $22.00 to $27.00 and gave the company a "buy" rating in a research report on Wednesday, October 11th.

"Hasbro's market cap of around $11.5 billion could likely absorb a takeover of Mattel, which has seen a almost 50% collapse in its share price this year amid a fast-changing retail market that has already claimed rival Toy R Us Limited by way of a September bankruptcy filing", observes The Street's Baccardax. Mattel's shares have slumped 47 percent this year, valuing the company at $4.8 billion and making it more vulnerable as a takeover target. Additional brands including He-Man and Polly Pocket could add more than US$2 billion to the toymaker's value. "Thus, the company could have value to a financial, industry or entertainment conglomerate buyer'".

Or use its own Hollywood connections to make stars out of Barbie and friends.

The news comes a week after it was announced Hasbro has teamed with Paramount Pictures to produce and distribute content based on Hasbro brands, as well as original stories. "The Transformers franchise has earned some $3.8 billion worldwide, while the G.I. Joe franchise brought in some $675 million".