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Entertainment One to reject ITV bid

Last updated: 03:10 10 Aug 2016 EDT, First published: 02:37 10 Aug 2016 EDT

Peppa Pig looking disgusted at ITV's offer
Entertainment One's library amounts to 4,500 hours of TV programming.

The majority owner of the Peppa Pig cartoon franchise Entertainment One (LON:ETO) is to reject an offer made by British broadcasting group ITV (LON:ITV).

The board of film and television production company Entertainment One unanimously rejected the broadcaster’s bid, the exact details of which were not disclosed.

Entertainment One said the offer had valued the group at 236p a share.

Shares in the group closed around 10% higher Tuesday bringing its valuation to more than £900mln.

Meanwhile shares in ITV have fallen almost 30% this year and was one of the broadcasters hit most by the Brexit vote.

In an attempt to strengthen its Studios division and reduce its reliance on advertising, ITV embarked on a spree of acquisitions. Last year it bought out Talpa, the studio that makes the Voice, which will see the talent show move from BBC to ITV next year.

Last month ITV Studios reported a 30% rise in revenues to £651mln, but it also warned advertising revenue could fall by 1% for the nine months ended September.

Toronto-based Entertainment One owns more than 40,000 TV and film franchises including Peppa Pig, Fear the Walking Dead and Grey’s Anatomy. Its library amounts to 4,500 hours of TV programming and is valued at more than US$1bn.

ITV was rumoured to have eyed the group back in April, but at the time Entertainment One denied it had been approached. 

"The question now is whether ITV comes back with a higher bid: it can afford to so the question is whether it has the desire to come back with a substantially higher bid," said analysts at Liberum.

"However, ITV may not be prepared to pay the £3+ per share that we believe many Entertainment One shareholders want," said the broker, which it says would put ITV's special dividend into question.

Shares in Entertainment One were riding 6.5% higher at market open Wednesday morning to 231.7p.

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