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Entertainment One and the rumored takeover by ITV

Entertainment One has officially spoken on the rumor that it is being taken over by British broadcasting company ITV. A representative for the company stated emphatically that the company has heard the rumor, but that it is completely false. He continued that the company has made some moderate changes, but it remains in its own territory with no plans of extensive expansion.

 

Despite what their representative noted, ITV reportedly is looking to expand its territory into new markets, and the Canadian-based Entertainment One would be a prime choice. Entertainment One made headlines last year when it was managing a myriad of top-dollar deals with Amblin Partners (owned by Steven Spielberg), Participant media and the Reliance Group. In December, the deal was officially signed and now the company is looking to level off the big move. It also is reportedly looking for more acquisition partners in coming years.

 

In essence, what this deal did was allow Entertainment One to expand into foreign countries and directly distribute. The company already acquired 70% of Peppa the Pig with $212-million. The company also made moves to finalize a majority stake in Gordon, another entertainment affiliate. Moves like these are pushing the rumor mill hard—ITV obviously is seeking a bigger market share of the billion-dollar entertainment industry.

 

In spite of the hefty financial buy-outs, Entertainment One is trading its shares at half the hoped value. The biggest question is the company’s debt-to-equity ratio, which has been in question for the past 12-months. This has opened the door for much of the speculation of an ITV buy-out. Investors know that a buy-out may be the only thing that can salvage the company’s financial problems.

 

Another sign of ITV’s intention, is their acquisition of a businesses. The company has been moving into other corporations and on to high-level executives. The company also brought in Polly Hill, drama head in chief for the BBC. The move surprised the market and put more focus on the pending changes the company is looking towards.

 

When it comes to corporate acquisition, ITV recently purchased Boom Supervisory LLC. It is the holding company of Brit TV, the equity arm of Lloyds Banking Group. The initial down payment for the company was $86-million, which equated to 75% of the entire company’s value. Moves like this make entertainment business insiders believe that ITV is moving to bigger and better things. The company is obviously expanding and, given their size, is likely going to make some serious changes in the market.

 

Not quelling rumors is ITV’s full control move for Mammoth Screen. By purchasing the entire company with a $530-million payment, it only helps to feed the rumors of continued expansion and take-overs. This purchase included Big Talk, Leftfield Entertainment and The Garden.

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