Studio couldn't justify bid on Brit company
Lions Gate Entertainment has backed away from plans for a $1 billion bid for British company HIT Entertainment, owner of Barney, Thomas the Tank Engine and other kids properties.Decision clears the way for private equity firm Apax Partners to take control. HIT shareholders including media mogul John de Mol last week approved Apax’s $880 million bid after Gotham-based Classic Media, the only other contender besides Lions Gate, dropped out. After conducting due diligence, indie studio apparently decided HIT wouldn’t be accretive enough to its earnings to justify a bid, which would have required taking on significant debt. “After our review of due diligence materials, we have determined that although HIT would be a potentially strong strategic fit, a Lions Gate/HIT transaction does not create the level of additional shareholder value that would be a prerequisite for moving forward,” said Lions Gate topper Jon Feltheimer. With the short-term debt company took on to acquire Artisan in 2003 erased, Lions Gate execs have said they’re on the hunt for other strategic acquisitions that could bolster its library or extend the company into related businesses. Lions Gate shares closed up 4% at $10.17 Thursday before news was announced.