Mattel Shares Surge Nearly 20% on Authentic Brands Takeover Interest

Mattel shares jumped nearly 20% on Thursday after the Wall Street Journal reported that Authentic Brands Group has expressed takeover interest in the toymaker.

Authentic, a brand licensing company, has privately discussed an offer that could value Mattel at more than $20 per share — roughly $6 billion or more — according to the Journal, which cited people familiar with the matter. Mattel traded just above $15 per share on Thursday afternoon, meaning the proposed valuation implies a premium of about a third over the stock's level before the rally.

A person familiar with the talks confirmed to CNBC that discussions between the two companies are underway. That source cautioned, however, that the conversations are very preliminary. The person added that the overture makes sense because Authentic has interest in entertainment properties, particularly those tailored to kids — a category where Mattel's portfolio of toy brands sits squarely.

Mattel declined to engage on the report. "As a matter of company policy, we do not comment on market rumors or speculation," a Mattel spokesperson said. Authentic also declined to comment.

A takeover bid lands during a leadership transition

The takeover interest arrives at a sensitive moment for the El Segundo-based toymaker. On Wednesday, Mattel announced that Condé Nast CEO Roger Lynch will take over as its next chief executive. Investors did not greet that news warmly: Mattel shares closed down 4% on Wednesday.

Lynch is no stranger to the company. He has served on Mattel's board since 2018. His transition into the top job comes in two steps: he becomes chairman on Oct. 2 and adds the CEO title by Nov. 2.

He succeeds Ynon Kreiz, who is leaving to become co-CEO of Paramount and Warner Bros. Discovery. That departure set the stage for Lynch's elevation, and now a potential change of ownership could complicate — or accelerate — the incoming chief's agenda before his first day in the corner office.

What a deal would mean

For Authentic Brands Group, a takeover of Mattel would extend a acquisition strategy built on licensing well-known consumer names. The reported price of more than $20 per share values the company at around $6 billion or more, according to the Journal's sources.

The nearly 20% share move on Thursday shows how much upside investors assign to even a preliminary approach. Still, the person who confirmed the talks to CNBC was explicit that they remain at a very early stage, with no assurance a formal offer will materialize.

Any transaction would also have to clear a board currently in transition, with a new chairman arriving in early October and a new CEO following in early November. Whether Mattel's leadership engages with Authentic, rebuffs an approach, or waits for a formal proposal will shape the next phase of the story.

The market's verdict so far is clear: investors see real value in Mattel beyond its $15 trading price, and they are pricing in at least the possibility that Authentic — or another suitor — pays it.