Canada-based Entertainment One said that it “unanimously rejected” a 236p-a-share proposal as it believes it “fundamentally undervalues” the group.
Entertainment One did not name its suitor, but ITV’s takeover plans were widely reported, 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.
ITV last month said it would slash £25m 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, including Talpa Media Holdings, which makes talent show The Voice, and Mammoth Screen, which produces Poldark.
It recently appointed Peter Bazalgette — the man credited with bringing Big Brother to UK screens — as chairman.
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.”