Hasbro purchases studio
Hasbro Inc. agreed to spend $4 billion for Entertainment One, the studio that makes the Peppa Pig and PJ Masks children's shows, expanding its media business at a time when the race to consolidate the TV and film-making industry is heating up.
The world's largest publicly traded toymaker will pay $6.87 a share in cash, 26 percent more than Thursday's closing price. Entertainment One rose as high as $7.56, indicating some investors anticipate a higher bid for the company, which also makes movies and music. The bonds reached a record high.
Hasbro's biggest-ever deal would give it TV production and development capabilities, including animated and live action shows, at a time when growth in video-streaming is spurring competition for content producers.
Entertainment One is a perennial takeout candidate, and the stock is supported by speculation that media giants such as Netflix Inc., Discovery Inc. or Liberty Media Corp. may be interested to gain its popular brands, analysts at broker OliveTree Financial said.
Hasbro has been a driving force in turning toy properties like Transformers into entertainment, but until now it mostly has had to license its characters to studios to make films, said John Tinker, an analyst for Gabelli & Co.
The acquisition also expands Hasbro's reach by adding a major international brand to its portfolio. Peppa Pig is a global success, with big viewership in China, and new brand Ricky Zoom has the makings of a hit, too, Tinker said. About half of Entertainment One's revenue comes from outside the U.S.