GI Joe is making the moves on Barbie — and the show has Wall Street wagging its tongue.
Shares of Barbie’s owner, Mattel, surged 21 percent Monday to $17.64 on a report that Hasbro — which makes GI Joe — wants to buy the company.
Investors liked the potential deal, first reported by the Wall Street Journal on Friday, as struggling Mattel desperately needs a boost and Hasbro is seen as capable of pulling off a turnaround.
Shares of Mattel have tumbled 47 percent this year, dragged down by slackening demand for Barbie dolls. Meanwhile, Hasbro’s shares have climbed 18 percent, lifted partly by the company’s grip on the “Star Wars” toy franchise.
A combined entity would account for more than a 50 percent share of such key toy categories as dolls, model vehicles, and action figures, Jefferies analyst Stephanie Wissink said in a research note. Together they would command 34 percent of the US market, according to Wissink.
As such, risk “does exist” that the deal could run into antitrust concerns with the Federal Trade Commision, Wissink said.
“They would control all of the major toy brands with the exception of The Lego Group,” said toy consultant Richard Gottlieb.
Among Mattel’s biggest brands are Fisher Price, Hot Wheels and Matchbox, while Hasbro has Nerf, Play-Doh, Transformers and Star Wars.
Last year, Hasbro wrangled the licensing rights to Disney’s Star Wars franchise from Mattel, also grabbing the rights to the lucrative Disney Princess dolls.
Still, the prospect of Hasbro buying Mattel is likely to alarm licensors like Disney, experts say.
“If there is no Mattel to bid against the dollars go down,” said Gottlieb, adding “It wouldn’t surprise me to see Disney make a run at Mattel. If Disney were to own Mattel it could keep the licensing in-house.”
It wouldn’t be the first time the toy giants tried to hook up. In 1996, Mattel tried to buy Hasbro, but was rebuffed. Last year, there also were rumors that Hasbro was…