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Mattel Surges in Pre-Market Amid Hasbro Takeover Play Speculation

Mattel Inc. (MAT - Get Report) shares are set to open at a three-month high Monday after a 22% surge in pre-market trading that followed multiple media reports of a takeover approach from rival Hasbro Inc. (HAS - Get Report)

Mattel shares were marked $3.26 higher in New York, indicating an opening price of $17.88, the highest since Aug. 10, amid reports, first published by the Wall Street Journal, of a tie up between the Barbie and Hotwheels maker with the owner of the Nerf and Monopoly brands.

Hasbro's market cap of around $11.5 billion could likely absorb a takeover of Mattel, which has seen a nearly 50% collapse in its share price this year amid a fast-changing retail market that has already claimed rival Toy R Us Limited by way of a September bankruptcy filing.

Hasbro topped Street estimates for its third quarter earnings last month with a bottom line of $2.09 per share on sales of $1.79 billion, but lower its outlook for the final three months of the year.

However, CEO Brian Golder said the Toys 'R' Us bankruptcy filing "will not be an issue for us in 2018" and told investors that the Pawtucket, Rhode Island-based group has "increasingly found great homes for our great products."

"We paused shipment for a short period as we gain clarity," Golder said. "Our finance and Toys 'R' Us commercial teams worked on an agreement we signed a few days ago... We just need to determine what Toys 'R' Us can receive in the next few months."

Goldner also recently told TheStreet founder Jim Cramer that Hasbro's "My Little Pony" franchise, the subject of a new Hollywood movie, is performing very well and that the company's packaged goods and game businesses both continue to see good box office sales and look forward to the home video and streaming revenue streams after that.