Entertainment One, the distributor of the Twilight films (pictured, right) in the UK and Canada, has been approached by Zodiak Media Group about a £400m reverse takeover approach, according to reports.
Discussions are understood to be at an early stage between the two television production and distribution businesses, whose merger would create a media group with about £1bn of annual revenues.
Entertainment One has been the subject of takeover talk since September, when it confirmed it is considering a sale as part of a strategic review of the business, with Sony, Lionsgate and Alliance Films linked to initial possible bids.
Zodiak has steadily increased its scale by buying TV production business RDF Media last June, followed by Bwark, the producer of The Inbetweeners, this July. It is reportedly interested in Entertainment One as a way of floating in a difficult market.
The company, part of De Agostini Group, consists of 45 production firms with presence in 18 territories.
A spokesperson for Entertainment One said it did not comment on speculation.
ADVISERS: JP MORGAN AND CREDIT SUISSE
ANY deal between Entertainment One and Zodiak Media would be handled by JP Morgan and Credit Suisse, the banks advising Entertainment One on its strategic review.
Leading the advisory panel at JP Morgan is Harry Hampson, the European telecoms and media investment banking chief who acted for Bertelsmann on the sale of its subsidiary RTL Group’s Channel 5 to Richard Desmond in July 2010.
On the Credit Suisse team is Alastair Blackman, the bank’s head of media investment banking, helped by colleagues Indy Bhattacharyya, Stuart Field and Joe Hannon. Blackman recently advised on the IPO of digital sports media group Perform, which floated 25 per cent of the business on the London Stock Exchange.
It is expected that Zodiak would bring Olswang’s corporate partner Chris Mackie on board, after the media law firm advised Zodiak Media Group on its acquisition of Bwark.