Peppa Pig owner Entertainment One rejects ITV takeover approach
The owner of popular children's TV character Peppa Pig has rebuffed a takeover approach from broadcasting giant ITV worth more than £1 billion.
Canada-based Entertainment One said it "unanimously rejected" a 236p-a-share proposal as it believes it "fundamentally undervalues" the group.
Entertainment One, which is listed on the London Stock Exchange, did not name its suitor, but ITV's takeover plans were widely reported late on Tuesday, sending shares in its bid target surging by almost 10%.
Entertainment One owns the rights to TV shows including Peppa Pig - the cartoon character who has turned into a global children's phenomenon.
It also owns more than 40,000 film and television titles, including last year's Oscar-winning hit Spotlight, and its Amblin Partners venture with Steven Spielberg is behind this summer's movie The BFG, based on Roald Dahl's classic children's book.
Entertainment One also owns around 40,000 music tracks.
A deal between the two would have helped ITV broaden its business and boost its content offering as it seeks to reduce reliance on advertising revenue, which is expected to come under pressure after the Brexit vote.
ITV last month said it would slash £25 million in costs as it warned advertising revenue is set to dip 1% in the nine months to the end of September amid the fallout from the decision to quit the EU.
ITV was rumoured to have had its sights on Entertainment One earlier this year, but the group denied being approached
ITV has acquired a number of production companies in recent years, i ncluding Talpa Media Holdings, which makes talent show The Voice, and Mammoth Screen, which produces Poldark.
It recently appointed Sir Peter Bazalgette - the man credited with bringing Big Brother to UK screens - as chairman, who took over from Archie Norman in May.
Analysts at Liberum said: "There is definitely a rationale for ITV to acquire E One and it would fit in with its stated policy of boosting the revenues from non-TV advertising sources.
"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."
ITV insisted its £1.03 billion approach was made at a "significant premium" to Entertainment One's share price before the recent bid speculation, and 19% higher than its share price on Monday.
It added: "ITV believes that the proposed combination with eOne has strong strategic rationale and would further accelerate ITV's rebalancing of the business."
But ITV remained tight-lipped on plans for any higher offer, saying only that it "reserves the right to withdraw, vary or amend the proposal".
Shares in Entertainment One leapt another 6% to 231.6p on Wednesday, while ITV also edged higher.