LONDON — U.S. toy giant Mattel is close to a £500 million ($786 million) deal to buy Hit Entertainment, owner of such tyke fare as “Bob the Builder” and “Thomas the Tank Engine.”
Mattel is in final talks to secure an agreement to acquire Hit from U.K. private equity combo Apax Partners, according to the Financial Times.
Apax bought Hit in 2005 for a reported £489 million ($767 million), and has been trying to sell the company since at least March.
But the anticipated sale price is around half what Apax had hoped to get for Hit when the sale emerged last fall.
The precarious economic situation appears to have left Apax with no alternative other than to lower the price if it wants to secure a sale.
Any sale will exclude Hit’s stake in U.S. tyke web Sprout, said the FT.
Mattel sees Hit as helping to drive growth opportunities in emerging markets such as China, where merchandising based on “Thomas the Tank Engine” is a big seller for pre-school boys.
Hit, originally created by the late U.K. TV entrepreneur Peter Orton, also owns such properties as “Angelina Ballerina,” “Fireman Sam” and “Pingu.”
The company is not alone in kids’ media outfits having to revise their expectations downwards in the light of falling DVD sales, uncertainty over future advertising revenues and what is a very competitive market.
Ex-Chorion topper Waheed Alli recently predicted further consolidation in the children’s TV and film rights market.