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London - Entertainment One, the film and TV distributor being pursued by UK broadcaster ITV, said it rejected a takeover offer that values the business at about £1bn ($1.3bn), and suggested it’s seeking a higher price.
The 236 pence-per-share proposal - from ITV according to a person with knowledge of the situation - represents an 8.5% premium to Entertainment One’s latest closing price. The Canadian company, owner of popular preschool cartoon character “Peppa Pig”, said in a statement on Wednesday that the bidder may come back.
“The ball is now in their court to come up with a better offer,” Patrick Yau, a spokesperson for Entertainment One, said by phone, declining to identify the suitor. “In the meantime, we’re going to carry on with our business.”
Entertainment One rose as much as 8.6% on Wednesday, to just above the offer price. The shares, which have soared about 40% since Bloomberg News reported in April that broadcaster ITV was pursuing a takeover, advanced 7.5% to 233.70 pence at 08:39 in London.
ITV has been looking at Entertainment One for several months, but there are internal divisions at the target over whether to explore a sale or pursue a standalone strategy, said the person, who asked not to be identified discussing private negotiations. ITV is unlikely to pursue a hostile bid, this person said.
An ITV representative didn’t respond to requests for comment.
Entertainment One would bring to ITV the “Peppa Pig” franchise, with more than $1bn in worldwide retail sales in 2015, as well as international distribution - furthering the London-based broadcaster’s expansion into production as it reduces its reliance on network advertising.
“The board of EOne has reviewed the proposal and has unanimously rejected it on the basis that it fundamentally undervalues the company and its prospects,” Entertainment One said on Wednesday in a statement.
ITV, known for shows including “Downton Abbey,” “Mr. Selfridge,” and long-running soap opera “Coronation Street,” has sought to bolster its production and distribution arm and expand beyond the UK. A year ago, it bought Talpa Media Holding, the maker of “The Voice” reality singing show, and Mammoth Screen, which produces the drama “Poldark.”
Entertainment One distributes TV and films in Canada, Australia, the UK and US and several European countries and has worked with titles including this year’s Academy-award winner “Spotlight,” “Fear the Walking Dead” and “The Hateful Eight”. The Toronto-based company last year raised its stake in Astley Baker Davies, the creator and producer of Peppa Pig.
ITV rose 0.1% to 198.90 pence for a market value of about £8bn.
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