Chorion set to give nod to £108m takeover

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The Independent Online

The entertainment group Chorion, home to the children's character Noddy, is set to announce today that it will be taken over by a large private-equity house in a £108m deal.

Speculation centred on Apax, which acquired HIT Entertainment, the company behind Bob the Builder, for £489m last spring.

Chorion was forced to issue a statement to the stock market yesterday after its share price jumped. It said it was in "advanced discussions" with a suitor. "If an offer were to be forthcoming, it is expected to be at a price of 425p in cash," the company said.

Shares in Chorion soared 20 per cent to 413.5p on the news, giving it a market value of £105m.

The approach is believed to be from a large private-equity firm and, barring any last-minute hitches, would be recommended by the board and announced today.

Chorion develops television programmes and merchandising based on its literary brands. Noddy will air on British screens until 2012, thanks to a long-term deal struck between Chorion and Channel Five. Make Way for Noddy also secured a second broadcast deal in the lucrative US market last year. The first 100 programmes made by Chorion are being shown on Sprout, a new children's channel owned by HIT, Comcast, Sesame Workshop and the American public broadcaster PBS.

Chorion relies on TV broadcasting to sustain demand for its highly profitable merchandising of Noddy, ranging from stories to toys.