Mattel Inc. again has rejected an unsolicited merger offer from rival toymaker MGA Entertainment Inc.
Isaac Larian, founder and chief executive of privately held MGA, said Tuesday that last month he renewed his offer to merge the companies. He made his initial overture a year ago and contends Mattel’s problems have worsened since then.
“They’re not delivering. Look at the results,” Larian said in an interview.
Mattel, based in El Segundo, makes the iconic Barbie doll, as well as Fisher-Price toys, Hot Wheels cars and American Girl dolls.
Chatsworth-based MGA’s brands include L.O.L. Surprise, Little Tikes and Bratz dolls. Its financial results aren’t public, but Larian said MGA’s annual sales top $2 billion.
Larian again did not propose a specific price for publicly held Mattel, saying an investment banker or other outside party could help determine an appropriate figure. But he said that “absolutely” it would be at a premium to Mattel’s current market price.
Mattel’s stock fell 2.3% to $10.81 a share Tuesday, giving Mattel a market value of $3.7 billion. The stock has dropped about 37% in the last 12 months. Five years ago it reached as high as $40 a share.
In a letter to Mattel Chairman and CEO Ynon Kreiz that reiterated MGA’s merger offer, Larian listed several financial metrics to illustrate Mattel’s problems, including ongoing operating losses, a higher debt load and lower shareholders’ equity.
Mattel last year lost $531 million on sales of $4.5 billion, but the company has said its turnaround is taking shape thanks to a widened marketing of Mattel’s well-known toy brands — especially in the entertainment and digital fields — and to a $650-million cost-cutting plan.
MGA’s latest offer was conditioned on Larian becoming Mattel’s chairman and CEO, and on all of Mattel’s current directors resigning “without any further compensation.”
In response, Mattel’s chief legal officer, Bob Normile, wrote to Larian last Friday that Mattel’s board “unanimously concluded that your proposal is not in the best interests of Mattel and its shareholders” and that the directors had no interest in further discussions. Mattel said Tuesday that it had no additional comment.
Larian, 65, has a net worth of $1.1 billion, according to Forbes. Last year he led an unsuccessful effort to buy some of the Toys R Us stores that were shut after the toy retailer filed for bankruptcy protection.