Bob the Builder HITs the jackpot after Â£475m offer
Saturday 19 March 2005
Hit Entertainment, home to Bob the Builder, Captain Pugwash and Barney the Dinosaur, is on the verge of being acquired for £475m.
The US media groups Lions Gate Entertainment and Comcast Communications are seen as possible bidders for HIT, which confirmed yesterday it was in late-stage takeover discussions, after a rise in its share price.
Talks are continuing between HIT and its suitor over the weekend, with an announcement expected in the next few days. The group said a 300p-a-share offer might be made. By the end of trading, HIT's shares were up 43p, or 17.2 per cent, at 293.25p. The company said it had the consent of the bidder to release its holding statement.
John de Mol, a founder of Endemol, the producer of Big Brother, has built up a stake of more than 10 per cent in HIT but is not thought to be the mystery bidder.
HIT, founded by its chairman Peter Orton in 1989, built its fortune on the back of its Bob the Builder character, expanding it from videos into a wide range of merchandising. HIT has grown rapidly in the US, buying Barney the Dinosaur which it has been developing in the UK. Other HIT characters include Thomas the Tank Engine, which has also been exported to the US.
Lions Gate is one of America's biggest independent studios and has a thriving family entertainment division which owns the rights to characters such as Inspector Gadget and the Hulk. It is understood to have been examining HIT as a possible acquisition but is known to have been concerned about the price HIT was asking for.
Comcast Communications is one of America's leading cable television and high-speed internet companies. Last year it mounted a hostile takeover bid for the Walt Disney Company and already has a commercial relationship with HIT.
The UK business has invested in a new 24-hour digital channel for US pre-school children in a joint venture with Comcast. The deal caused anxiety among some investors who feared HIT would have to show its material on the Comcast channel before other networks.
HIT has suffered from difficult trading in recent times. A statement in January said its consumer products licensing business was suffering weak trading. It said orders from certain major US trading partners would fall in the second half of the year, hitting half-year results compared with the previous year.
HIT has expanded aggressively with bids for rivals, such as its 2002 acquisition of its quoted rival Gullane which not only brought with it Thomas the Tank Engine but also properties such as the Guinness World Records business.
HIT's intellectual property is broadcast in 180 countries. Other characters include Pingu and Angelina Ballerina.
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