ITV eyes ‘Peppa Pig’ buy

The owner of UTV Ireland, ITV, is pursuing a takeover of Entertainment One, the $1.1bn (€970m) Canadian company that owns the rights to popular children’s cartoon Peppa Pig, according to sources.

The broadcaster, whose shows include soap opera Coronation Street, has held talks with Entertainment One about a possible deal, the sources said. Shares of Entertainment One rose the most in more than four years in London.

Peppa Pig would bring to ITV a TV franchise with more than $1bn in worldwide retail sales in 2015, and further the London-based broadcaster’s expansion into production as it cuts reliance on network advertising.

A more than 50% slump in Entertainment One’s shares in recent months makes the target a bargain relative to its past market value.

“For ITV, it’s all about the content and so a deal for Entertainment One makes sense, and the shares have slumped so it’s opportunistic,” said Ian Whittaker, a media analyst at Liberum in London.

Entertainment One distributes TV and films in Canada, Australia, the UK, and US and several European countries and has worked with titles including this year’s Academy-award winner Spotlight, Fear the Walking Dead, and The Hateful Eight. ITV would probably sell the movie-distribution business to focus solely on TV, said Alex DeGroote, an analyst at Peel Hunt.

“I can’t see ITV wanting the film business when the TV content is the most valuable, especially Peppa,” he said. ITV a year ago bought Talpa Media Holding, the maker of The Voice and Mammoth Screen, which produces the drama Poldark.

* Bloomberg