Southeastern Asset Management Issues Open Letter Calling on Mattel to Explore Strategic Alternatives
Board of Directors and Shareholders of
c/o Secretary, TWR 15-1
VIA Email, FedEx and Press Release
Open Letter to the Board and Shareholders of
Ynon,
As you know, Southeastern has been a supportive
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Private equity buyers have circled
Mattel in the last few years. Mattel’s business does not always lend itself well to the quarterly results stability that the public equity market prefers. We also wonder how Mattel’s controversial$150 million of investment spending in 2026 would go if the Company were private – maybe even more spending, maybe less? We believe this is a cash-generative business that can support a larger amount of leverage when it doesn’t have to worry about quarterly results and annual guidance. -
The most logical strategic buyer of
Mattel is likely another “toy” company. We put “toy” in quotes as the industry has a broad spectrum, andMattel itself is not and should not be focused only on selling physical items. We know thatMattel and Hasbro have engaged in on-and-off talks for decades. At the moment, a deal between the two companies is possible in our view. Hasbro has done a better job executing on digital growth thanMattel and therefore has more credibility in this important part of the business. We believe synergies between the two companies would be material, creating a stronger player in a global industry. There are also other toy companies of size around the world who would be interested inMattel . A smaller sale of Fisher-Price only (after its years of underperformance) in order to print a better consolidated growth rate is not sufficient forMattel to realize its potential. -
Now that the dust has settled from the Warner bidding war, large media companies are looking for their next moves.
Mattel has valuable intellectual property that we believe would fit well with one of these entities. The public market was not willing to pay for the success of the Barbie movie and might not be willing to pay for a pipeline of other content atMattel , but a media company would value these assets.
These three categories are not mutually exclusive: a toy company might not want to make movies or a media company might not want to make toys, all while certain private equity buyers might only want certain parts of
We worry that your current compensation package incentivizes waiting too long for a stock price over
Sincerely,
This is NOT a solicitation of authority to vote your proxy.
Please DO NOT send us your proxy card as it will not be accepted by Southeastern.
About
Southeastern is a 100% employee-owned, global investment management firm founded in 1975. We are long-term, concentrated, engaged value investors as defined by our Business, People, Price approach. Headquartered in
Disclaimer
This press release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities described herein in any state to any person. The information herein contains “forward-looking statements”. Specific forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts and include, without limitation, words such as “may,” “will,” “expects,” “believes,” “anticipates,” “plans,” “estimates,” “projects,” “potential,” “targets,” “forecasts,” “seeks,” “could,” “should” or the negative of such terms or other variations on such terms or comparable terminology. Similarly, statements that describe our objectives, plans or goals are forward-looking. Forward-looking statements are subject to various risks and uncertainties and assumptions. There can be no assurance that any idea or assumption herein is, or will be proven, correct or that any of the objectives, plans or goals stated herein will ultimately be undertaken or achieved. If one or more of such risks or uncertainties materialize, or if the underlying assumptions of Southeastern prove to be incorrect, the actual results may vary from outcomes indicated by these statements. Accordingly, forward-looking statements should not be regarded as a representation by Southeastern that the future plans, estimates or expectations contemplated will ever be achieved.
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