Mattel (MAT), Hasbro (HAS) Likely Suitors for Struggling LeapFrog (LF)
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Price: $14.51 -1.43%
Rating Summary:
14 Buy, 11 Hold, 3 Sell
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Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Rating Summary:
14 Buy, 11 Hold, 3 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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Mattel Inc. (NASDAQ: MAT) and Hasbro Inc. (NASDAQ: HAS) are seen as potential buyers for LeapFrog Enterprises Inc. (NYSE: LF) according to Reuters, as the company's disappointing outlook last month made it a potential $650 million takeover target.
Mattel CEO Robert Eckert said last week that M&A activity in the toy industry looks more attractive as companies struggle, but added that his company would follow the mandate of "the right thing at the right time at the right price."
Reuters cited fund manager Robert Auer, who sold his stake in LeapFrog after the shares dropped. Auer said that LeapFrog could get an offer of $7.50-$10 per share.
An offer for LeapFrog of $10 per share would value the company at $646 million, which is more than double the company's current market cap.
Wedbush analyst Edward Woo said that Mattel is the more likely bidder, as the company already owns the infant toy maker Fisher Price.
"Mattel will be the more likely bidder because they're stronger in the pre-school category ... there would be great synergies with Fisher Price," said Woo. "It's not just the money, it's also the time and attention. Hasbro wants to focus on big brands ... and LeapFrog doesn't necessarily do that."
Shares of LeapFrog are up 6.51 percent to $4.58 in midday market movement on Thursday.
Mattel CEO Robert Eckert said last week that M&A activity in the toy industry looks more attractive as companies struggle, but added that his company would follow the mandate of "the right thing at the right time at the right price."
Reuters cited fund manager Robert Auer, who sold his stake in LeapFrog after the shares dropped. Auer said that LeapFrog could get an offer of $7.50-$10 per share.
An offer for LeapFrog of $10 per share would value the company at $646 million, which is more than double the company's current market cap.
Wedbush analyst Edward Woo said that Mattel is the more likely bidder, as the company already owns the infant toy maker Fisher Price.
"Mattel will be the more likely bidder because they're stronger in the pre-school category ... there would be great synergies with Fisher Price," said Woo. "It's not just the money, it's also the time and attention. Hasbro wants to focus on big brands ... and LeapFrog doesn't necessarily do that."
Shares of LeapFrog are up 6.51 percent to $4.58 in midday market movement on Thursday.
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