ITV threw in the towel yesterday in its £1 billion offer to buy Entertainment One, the company behind Peppa Pig.
The broadcasting giant withdrew its proposal to take over Entertainment One after the Canada‑based firm rejected an initial offer earlier this month.
ITV said that it “continues to believe in the strategic logic and potential benefits of acquiring Entertainment One, but has a clear view of the value of the business, recognising that this value would need to be verified by appropriate due diligence”.
It added: “It appears this value is different to the level at which the board of Entertainment One would currently engage in a more formal process.”
ITV said it would continue with its strategy to “build a stronger, more diversified international business”.
Entertainment One had previously unanimously rejected a 236p-a-share proposal as it believed it “fundamentally undervalues” the business. Its stock had risen above ITV’s takeover approach, but closed last night down 14 per cent, or 35.7p, at 215.1p. ITV added 1p to 202.8p.
Entertainment One owns the rights to TV shows including Peppa Pig – the cartoon character who has turned into a global children’s phenomenon.
It is the second major takeover bid involving UK suitors walking away in the past week. Mecca Bingo and casinos operator Rank Group and online gambling business 888 Holdings pulled out of their joint £3.16bn offer approach for William Hill after the bookmaker refused to engage in talks, also saying the offer substantially undervalued the business.
Entertainment One 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.
In all, it has 4,500 hours of TV programming and 45,000 music tracks. Its library is valued at more than $1bn. ITV added yesterday: “ITV has a clear strategy to build a stronger, more diversified international business and will continue its disciplined approach to evaluating its healthy pipeline of potential investment opportunities.”
One analyst commented: “This had the feel of a good strategic media fit, and continued ITV’s diversification, but failed at the price hurdle as so many mergers do.”