Mattel offers pounds 46m to put Polly in its pocket
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Your support makes all the difference.MATTEL, the US toy giant, yesterday launched a pounds 46m agreed bid for Bluebird Toys, in effect thwarting the hostile pounds 42m takeover offer initiated by Guinness Peat Group in January.
The offer by Mattel, the maker of Barbie dolls, came more than a month after Bluebird rejected a bid of 101p-a-share from GPG. The latest offer values Bluebird at 111p-a-share, which Bluebird said it accepted "in the absence of any higher offer".
A spokesman for Mattel said it would be "very surprising" if another offer were put on the table. "The market thinks this is it."
Bluebird, the maker of Polly Pocket and The Tiny Disney Collection, has been under fire for drastic profit losses in recent years. The market responded to the announcement by dropping Bluebird's share price 3p to 111.5p. Mattel's offer represents a 30.6 per cent premium over Bluebird's closing share price of 85p a share on 16 January, the day before GPG's initial offer.
The deal was unveiled as Mattel announced it was exercising its rights to manufacture Polly Pocket in North America, which Chris Burgin, Bluebird's chief executive, said would lead to the "consequential reduction in profits to Bluebird from this vitally important product".
Later, Guinness Peat said this statement showed the deal was "onerous and prejudicial" to Bluebird. Blake Nixon, an executive director, said: "It is extraordinary that an offeree only sees fit on the 45th day of an offer period finally to inform shareholders of the existence of such prejudicial arrangements."
Bluebird's North American sales in 1996 were pounds 15.7m, but fell to pounds 5.8m in 1997. Polly Pocket is a key product in Bluebird's arsenal, yet the North American market failed to respond to the toy.
A 1999 relaunch of Polly Pocket has been planned, a move which Jill Barad, the chairman of Mattel, said would be shored up with the company's backing: "The offer reflects Mattel's confidence in the Polly Pocket and The Disney Tiny Collection brands. Our acquisition ... will ensure that Mattel is well-positioned to grow these brands to their full potential."
Mr Burgin said the acquisition would reduce shareholder risk. "A great deal of the potential value in Bluebird depends upon the successful relaunch of Polly Pocket and The Tiny Disney Collection in North America, which necessarily carries with it not inconsiderable risks," he said. "This offer from Mattel removes any risk or uncertainty for our shareholders as to the future outcome of these relaunches."
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