Studio bids for Brit kiddie company
“Barney,” meet “Diary of a Mad Black Woman.”
Lions Gate Entertainment, the indie studio behind sleeper hits like “Diary” and “Saw,” is considering bolstering its family entertainment library with an unsolicited bid that would likely exceed $1 billion for HIT Entertainment, the British company behind such tyke favorites as the purple dinosaur, “Bob the Builder” and “Thomas, the Tank Engine.”
If Lions Gate does make a play for HIT, it would be a hostile bid, as HIT’s board agreed to a $934 million takeover offer from Blighty venture capital firm Apax Partners in mid-March.
Indie studio recently requested financial information from HIT and is expected to decide whether it will make a bid in two to three weeks.
It may not be the only additional bidder, as HIT has received a request for information from another potential candidate.
British company would be a natural fit for Lions Gate, bolstering its 8,000-plus title library with another 1,000 episodes of moppet programming and strengthening its sizable family entertainment unit.
Lions Gate already controls kids properties such as “Clifford the Big Red Dog” and “Inspector Gadget” and has home entertainment rights to “Barbie” and some Marvel superhero characters.
It controls 6% of the family homevideo market, HIT 8%.
Studio would have to borrow heavily to make such a bid. Lions Gate ended 2004 with little cash as it focused on eliminating the debt it accrued to acquire Artisan in 2003; that debt totaled just $75 million on Dec. 31. Company has since raised $175 million in long-term notes it said it would use to finish off the debt and for strategic acquisitions.
Apax’s bid came into some question Friday when “Thomas the Tank Engine” creator Britt Allcroft took out an ad with an open letter in Daily Variety. “The bottom line needs to embrace the ethics and values associated with Thomas,” he wrote. “They have always been intrinsic to his appeal. They are the reason your cash registers ring.”