Shares of Mattel (MAT - Get Report)  dropped more than 5% on Wednesday after reports surfaced that California toy mogul Isaac Larian no longer has interest in merging his company with the struggling toy maker.

Larian's comments came a week after he disclosed that Mattel had again rejected a second merger offer with Larian's privately held MGA Entertainment.

"At this time, it is in the best interest of MGAE not to continue forward with a Mattel offer," Larian said in a statement to The Los Angeles Times.

El Segundo, Calif.-based Mattel makes the famed Barbie doll along with Fisher-Price toys, Hot Wheels and the American Girl dolls. MGA's toy brands include LOL Surprise, Little Tikes and the Bratz dolls.

Larian pointed to Mattel's near-$4 billion in debt and the "major legal liability" related to Fisher-Price's Rock 'n Play Sleeper that it is facing, which has been linked to the deaths of 30 infants since its introduction a decade ago and is now being recalled. Mattel has said the product is not faulty.

"There is simply too much mess to clean up at Mattel," Larian said.

Shares of Mattel were down 5.27% at $11.42 on Wednesday. The stock jumped more 8% last week after Larian's second offer was turned down by Mattel's board.