What happened

Shares of toy maker Mattel (MAT 2.40%) surged on Tuesday afternoon, gaining more than 10% in the last two hours of trading. There was no news driving the gain. Mattel stock closed up 10.4%, while rival Hasbro (HAS 11.85%) closed up 4%.

So what

Hasbro proposed to acquire Mattel late last year for an undisclosed price. Mattel rebuffed the offer, reportedly because it undervalued the company. It's unclear whether Tuesday's surge has anything to do with takeover speculation.

A notepad page with M&A and a drawing of a big fish eating a little fish.

Image source: Getty Images.

Mattel has had a rough few years. The stock is down 63% from its five-year high, and it fell 44% in 2017, the result of slumping revenue and vanishing profits. Revenue over the trailing-12-month period totaled $5.1 billion, down from a peak of $6.5 billion in 2013. Mattel's operating margin was a meager 3.4% over this period, down from typical values in the mid-teens.

Now what

A takeover by Hasbro, which has consistently grown revenue and profits in the past few years, is still a possibility. There would almost certainly be antitrust issues, though, given how big the combined company would be.

For Mattel, being acquired may be the path of least resistance. The company's holiday results aren't likely to be very good, and it may take years for it to regain its footing. Mattel is scheduled to report its fourth-quarter results on Feb. 1.