Mattel Jumps Nearly 20% on Report Authentic Brands Weighs a $6 Billion Takeover

MAT shares jumped nearly 20% on Thursday, October 1, after the Wall Street Journal reported that Authentic Brands Group has privately discussed a takeover offer that could value the Barbie maker at more than $20 per share, or about $6 billion. A person familiar with the matter confirmed to CNBC that discussions are taking place but cautioned that they are very preliminary, and Reuters separately cited a source describing an approach at around $6 billion or more. Mattel said it does not comment on market rumors or speculation, and Authentic declined to comment.

The report drew in options traders. On Friday, investors bought 7,239 Mattel call options, about 145% above the average daily volume of 2,953 contracts. The stock gave back a little of Thursday's gain, trading around $14.72 to $14.86 on Friday, well short of the $20-plus level discussed in the report, a gap that reflects how early the talks are and that no definitive agreement exists. MarketBeat puts Mattel's market capitalization at about $4.20 billion, with a consensus Hold rating and an average price target of $17.80.

The approach lands in the middle of a leadership change. On Wednesday Mattel named Condé Nast CEO Roger Lynch, a Mattel director since 2018, as chairman from October 2 and CEO by November 2, succeeding Ynon Kreiz, who is leaving to become co-CEO of the combined Paramount and Warner Bros. Discovery; Mattel shares closed down 4% that day. The transition comes amid reports of weakening Barbie sales, and Mattel's most recent quarter, reported August 4, showed earnings of $0.01 per share against a $0.04 consensus even as revenue rose 10.5% year over year to $1.13 billion.

What to watch: whether either company confirms talks or a formal bid emerges, whether other suitors surface, and how Lynch approaches a possible sale as he takes over. CNBC's source said Authentic's interest centers on entertainment properties aimed at kids, which suggests Mattel's brand library, rather than its toy manufacturing, would be the main attraction in any deal.