MGA Entertainment’s CEO is no longer interested in merging with Mattel — saying there’s “too much mess to clean up” after the toymaker rejected his offer to take over the company earlier this month.
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Isaac Larian, the founder and CEO of MGA, said in a statement he believes Mattel is in too much debt and has operating expenses that are too high. He also said Mattel faces a major legal liability for selling a Fisher-Price Rock ‘n Play Sleeper “for years even as multiple baby fatalities occurred.” Fisher-Price recalled the product in April.
MGA owns brands like Num Noms, Little Tikes, L.O.L. Surprise!, Bratz, among others. Bob Normile, Mattel’s chief legal officer, said at the time the board “unanimously concluded that your proposal is not in the best interests of Mattel and its shareholders,” adding the company was “not interested in further discussions."
It was the second time Mattel rejected an offer from MGA to merge, according to correspondence posted on MGA’s website.
Larian initially said he was still considering other options to acquire Mattel. However, this week he said he believes Mattel “cannot be salvaged at this point and most certainly not under the current, hostile board and management.”
Mattel has reportedly received several buyout proposals as it has struggled with issues like the Toys R Us bankruptcy and the loss of a licensing deal with Disney for its princess and “Frozen” lines in 2016. But Mattel has rejected the offers and continued signing new deals, including a new licensing agreement for Hello Kitty and a collaboration with Blumhouse Productions for a live-action Magic 8 Ball movie the company announced this month.