ITV eyes mega deal for Peppa Pig owners

Canada-based Entertainment One said it “unanimously rejected” a 236p-a-share proposal as it believes it “fundamentally undervalues” the group.

Entertainment One, which is listed on the London Stock Exchange, did not name its suitor, but ITV’s takeover plans were widely reported late on Tuesday, sending shares in its bid target surging by almost 10 per cent.

Entertainment One owns the rights to TV shows including Peppa Pig - the cartoon character who has turned into a global children’s phenomenon.

It also owns more than 40,000 film and television titles, including last year’s Oscar-winning hit Spotlight, and its Amblin Partners venture with Steven Spielberg is behind this summer’s movie The BFG, based on Roald Dahl’s classic children’s book.

A deal between the two would have helped ITV broaden its business and boost its content offering as it seeks to reduce reliance on advertising revenue, which is expected to come under pressure after the Brexit vote.

ITV last month said it would slash £25 million in costs as it warned advertising revenue is set to dip 1 per cent in the nine months to the end of September amid the fallout from the decision to quit the EU.

Analysts at Liberum said: “There is definitely a rationale for ITV to acquire E One and it would fit in with its stated policy of boosting the revenues from non-TV advertising sources.”

An ITV spokesman said: “ITV believes that the proposed combination with eOne has strong strategic rationale and would further accelerate ITV’s rebalancing of the business.”

But ITV remained tight-lipped on plans for any higher offer.