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MGA CEO says Mattel will be bankrupt 'within a year or so' after takeover bid is rejected

Key Points
  • Isaac Larian's takeover offer was rejected last week.
  • Larian said Mattel was worth $6 per share, barely 50% of its closing price Thursday.
  • Larian previously tried to buy part of Toys R Us.
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MGA Entertainment CEO on failed merger bid with Mattel

MGA Entertainment CEO Isaac Larian said on CNBC's Closing Bell that toymaker Mattel will be bankrupt "shortly, within a year or so" after the company rejected MGA's takeover.

Larian made a proposal in May that would make him Mattel's chairman and CEO, but the offer was rejected last week, according to Reuters. It is unclear how much MGA offered for the company, which has a market cap of just over $4 billion.

Much of Larian's criticism was directed at Mattel's board.

"They have nobody from the toy business on that board except one guy who ran a company called Top Toys in Denmark, and Top Toys went into complete liquidation," Larian said.

Last year, Larian tried to buy part of bankrupt toy retailer Toys R Us but was rejected.

Larian also told CNBC that he thought Mattel was worth $6 per share. The maker of Barbie finished trading at $11.73 per share on Thursday, recovering from a sharp drop following Larian's comments.

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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.