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Mattel rejects a renewed merger bid from rival MGA Entertainment

Key Points
  • Mattel last week rejected another merger offer from Bratz doll maker MGA Entertainment, MGA's chief executive officer, Isaac Larian, said.
  • In response, Bob Normile, Mattel's chief legal officer, wrote to Larian on June 7 that the company's board unanimously concluded that the proposal was "not in the best interests of Mattel and its shareholders."
  • Mattel has been struggling to boost its sales, which have fallen for the past three years, and the Barbie maker's stock has lost 37% of its value in the past 12 months.
The Mattel sign is pictured at the Nuremberg International Toy Fair, Jan. 29, 2014, in Nuremberg, Germany.
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Toymaker Mattel last week rejected another merger offer from Bratz doll maker MGA Entertainment, MGA's chief executive officer, Isaac Larian, said on Tuesday.

MGA Entertainment made the proposal in a letter to Mattel CEO Ynon Kreiz dated May 21, according to emails that Larian shared with Reuters.

In response, Bob Normile, Mattel's chief legal officer, wrote to Larian on June 7 that the company's board unanimously concluded that the proposal was "not in the best interests of Mattel and its shareholders."

MGA's renewed offer was on condition that Larian would become Mattel's chairman and CEO and all of Mattel's board members resign "without any further compensation."

While Larian did not propose a specific price for the bid, he told Los Angeles Times that it would "absolutely" be at a premium to Mattel's current market price. Mattel had a market value of $3.52 billion as of Tuesday's close.

Larian first made overtures to Mattel in April of last year, the emails showed.

Mattel has been struggling to boost its sales, which have fallen for the past three years, and the Barbie maker's stock has lost 37% of its value in the past 12 months.

Larian said that Mattel's problems have worsened since his original offer.

Mattel's shares rose 8.2% after the closing bell.

Mattel did not immediately respond to Reuters' request for comment.

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Key Points
  • Demand for Barbie dolls and toys based on "Jurassic World" and "Toy Story" led Mattel to a narrower-than-expected-loss.
  • This may indicate that the U.S. toy industry is finally able to put the bankruptcy and closure of Toys R Us behind it.
  • Sales of Barbie jumped 7 percent in the quarter, the sixth consecutive quarter of growth for the doll brand.