Activist investor Barington Capital is pressuring toymaker Mattel (MAT.O) to make significant changes, including exploring strategic alternatives for its Fisher-Price and American Girl brands and separating the roles of CEO and chairman.
Barington Capital has also requested a halt to what it considers excessive stock-based compensation, as well as a $2 billion share repurchase, according to a letter to Mattel CEO Ynon Kreiz on Thursday, without disclosing its stake in the company.
“The long decline at both Fisher-Price and American suggests that Mattel may not be the right owner of these brands,” Barington Chairman James Mitarotonda wrote in his letter.
Barington’s stated about the sale of American Girl and Fisher-Price, “We believe that these brands are now detracting from the success of Mattel’s other segments and hurting shareholder value.”
“We look forward to engaging with Barington as we do with all our shareholders,” Mattel said in an email statement to Reuters, adding that it is currently reviewing their letter.
Mattel said in October that growth at Fisher Price, Challenger Brands, and Hot Wheels would be largely offset by a decline in Barbie.
Kreiz is the current chairman of Mattel.
The Wall Street Journal first reported Barington’s investment in Mattel. Shares of the Barbie and Hot Wheels manufacturer rose 5% in extended trading following the report.
Activist investors have increased their demands for changes at companies, such as taking larger stakes and assuming board seats.