Entertainment One had rejected a $1.3-billion offer from ITV earlier this month, saying that the amount “fundamentally undervalues the company and its prospects.” While some expected that ITV would increase its bid, the British television giant said Thursday that it was giving up on a deal.
“ITV continues to believe in the strategic logic and potential benefits of acquiring eOne but has a clear view of the value of the business, recognizing that this value would need to be verified by appropriate due diligence,” the company said in a statement. “It appears this value is different [from] the level at which the Board of eOne would currently engage in a more formal process.”
Shares in eOne, which is headquartered in Toronto but listed in London, dropped after the announcement. In addition to running distribution operations in North America, Europe and Australia, the company owns majority stakes in the firms that produce “Grey’s Anatomy” and animated series “Peppa Pig”
Acquisition of eOne would have been a major coup for ITV, Britain’s leading commercial broadcaster, which has been on a buying tear as part of its strategy to reduce its dependence on advertising. Although ITV recently announced budget cuts of £25 million (about $33 million), which it blamed on Britain’s decision to exit the European Union, it nonetheless submitted a £1.03 billion takeover offer for eOne.
“ITV has a clear strategy to build a stronger, more diversified international business and will continue its disciplined approach to evaluating its healthy pipeline of potential investment opportunities,” the broadcaster said.
EOne has reportedly attracted interest from a range of companies including New York private equity firm KKR & Co., Germany’s ProSeiben and France’s Vivendi.