Mattel shares skyrocket more than 20% on report of Hasbro takeover interest

Mattel shares skyrocket more than 20% on report of Hasbro takeover interest

Despite its financial woes, brands like Fisher Price and Hot Wheels, which are still seen as valuable, are said to make Mattel "ripe for a takeover" by Hasbro.

According to a report on the WSJ, Hasbro had recently approached Mattel with the deal.

Hasbro approached El Segundo, Calif. -based Mattel recently with a takeover offer but terms of the proposal were not available, The Wall Street Journal reported Friday, citing unidentified sources.

If the deal were to go through, it would bring the two largest toy companies in the USA and their vast catalog of brands together. Shares of Hasbro rose 3.6% to $94.70 after hours. But Mattel's shares are down by almost half this year alone - an appealing discount for Hasbro.

Mattel in late October reported a 14 percent drop in its third-quarter sales, excluding the effect of currency fluctuations, and suspended its quarterly dividend.

The report comes close on the heels of the bankruptcy of Toys'R'Us - a major outlet for toy sales - that piled more pressure on an industry already struggling with online competition and lackluster demand for traditional toys.

Mattel's market value is $5 billion after the stock plunged 47% so far this year. Mattel stock fell on that day to its lowest since 2009.

Mattel has not been the only target of Hasbro, which is trying to diversify its revenue stream.

That deal would have given Hasbro a direct pipeline into Hollywood, with more movies and TV shows tied to its toy brands.

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