Analysts have named Walt Disney, Vivendi, Lionsgate and Studio Canal as possible suitors for Peppa Pig owner Entertainment One.
EOne’s share price was trading at 251p on Monday – up more than 25 per cent from below 200p at the beginning of last week.
15 August 2016 @ 4:15pmEntertainment One Ltd (ETO)
This rise has come after the board rejected a £1bn offer from ITV and private equity house KKR emerged as a potential rival for EOne.
“I don’t think ITV would want to get into a bidding war for Entertainment One with KKR or anyone else,” Liberum media analyst Ian Whittaker told City A.M. “I think for KKR it makes sense, because you’ve got Peppa Pig, a valuable franchise.”
He suggested ITV would need to improve its 236p-per-share bid by a considerable amount for it to be accepted by EOne. He said the London-listed company’s board would be looking for a bid in the range of 350-400p.
Alex De Groote, of Peel Hunt, said an offer as low as 280p could get board approval. But the analyst said he would be surprised if a KKR offer materialised.
And he wasn’t sure it would be the right deal for ITV, either.
“At the right price, it could look quite shrewd, but it’s definitely not must-have,” De Groote told City A.M.
Both Whittaker and De Groote suggested ITV would not be interested in EOne in its entirety, with the film side of the business not being as attractive as the TV side.
“We’d be dubious that they would be long-term owners of that [film] business,” said De Groote. “So any deal to buy Entertainment One probably would involve third parties who would take on the film assets either at the time or at a subsequent date.”