LONDON – The Entertainment One film studio and distribution business has received — and rejected — a takeover proposal from ITV PLC.
The London-listed company — which has historical roots in Canada — confirmed the ITV approach this morning after media reports noted a sharp spike in its stock price on Tuesday.
It said ITV’s proposal was valued at 236 pence per share of Entertainment One (LSE:ETO). At current exchange rates, that would be worth about C$4 per share or C$1.87 billion.
The shares were trading at about 230 pence this morning, about 16 per cent above Monday’s closing price before the surge began.
Entertainment One issued a statement confirming that it had been approached by ITV and that the price was rejected as too low.
ITV — which operates the largest commercial family of channels in the United Kingdom — produces content for its own channels with an eye to expanding overseas.
It said the proposal delivered on Monday was significantly above eOne’s share price before the impact of recent media reports. It’s 19.3 per cent above eOne’s share price of 197.90 pence on Aug. 8 and 41 per cent above the eOne price on July 11, just prior to a round of media speculation about ITV’s interest in a deal.
“ITV believes that the proposed combination with eOne has strong strategic rationale and would further accelerate ITV’s rebalancing of the business,” ITV said in a release.
Among other things, Entertainment One was behind the movie “Spotlight” and the AMC television drama “The Walking Dead.” In total it has about 40,000 film and television titles.
“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 in a statement.
Entertainment One has grown through a series of acquisitions into one of the world’s biggest film and television companies. Its roots go back to Toronto, and the music distributor Records on Wheels.
It continued to grow in Canada before making its transatlantic leap. It became known as Entertainment One in 2005 and has been listed on the main London Stock Exchange since 2010.