Ariel Investments, a major shareholder in Mattel, Inc (NASDAQ:MAT), is urging the Barbie maker to consider a sale or other strategic alternatives as the company struggles to revive its business.
John Rogers, Ariel’s chairman and co-chief executive, told Mattel’s board that a strategic buyer could pay a significant premium to the company’s current share price, Reuters reported, citing a letter seen by the news agency.
The Wall Street Journal also reported that Ariel, which owns a 5.4% stake in Mattel, believes the company’s shares remain significantly undervalued under its current structure.
Rogers said Mattel should consider options including the sale of significant assets, a merger or an outright sale, with potential buyers including entertainment companies, other toy companies and private equity firms.
The latest pressure follows takeover interest from Authentic Brands Group, the brand licensing company, which has been reported to be considering an offer that could value Mattel at about $6 billion or more.
Mattel shares rose sharply after the takeover interest was reported last week, but the stock has remained under pressure this year as the company works to revive sales and profitability.
The company’s performance had improved following the success of the 2023 Barbie film, but operating income has subsequently fallen for six consecutive quarters, according to Reuters.
Mattel is also undergoing a leadership transition, with Roger Lynch appointed chief executive after Ynon Kreiz stepped down to become co-chief executive of Paramount Skydance following its merger with Warner Bros Discovery.
Mattel said its board and management would consider the views expressed in Ariel’s letter alongside those of other shareholders while acting in the interests of all investors.
The renewed sale discussion adds pressure on Lynch as he prepares to lead Mattel through a turnaround while shareholders weigh whether the company can create greater value independently or through a transaction.
