Boardroom crisis rocks home of Basil Brush, Rupert Bear and Lassie

On screen, they inhabited idyllic worlds where laughter and fun with friends was never far away. But the perfect lives of children's favourites Rupert Bear, Postman Pat and Basil Brush are under threat, for the company that owns them is in crisis.

Entertainment Rights – which owns the rights to the popular television trio – announced this week that its chief executive and founder Michael Heap was leaving after nine years at the helm.

Mr Heap's departure is the latest blow to the company, whose problems are said to stem from a combination of dwindling interest in their products and a poor Christmas period. Its share price has dropped 73 per cent in the last 12 months.

The new chief executive will be Nick Davies, the former UK chief executive of the American music group Warner. And his arrival may not be the last change in the hierarchy of a company that is open to takeover bids.

This week Entertainment Rights revealed it is in "very preliminary talks" with two unnamed parties which "may or may not" lead to an offer.

It's all a far cry from the heady days of 2006 when Mr Heap was leading the world's biggest independent owner of children's brands following the purchase of its American rival Classic Media for £106m.

The deal added Lassie and the Lone Ranger to an already considerable portfolio of popular children's television characters. That was the high-tide mark, however, and since then it has been a struggle for the company to hold up its share price and maintain momentum.

Entertainment Rights was established by Mr Heap in 1999 and initially had a portfolio comprising just 50 hours of programming. Its first year's revenue was £1.8m but it expanded to more than 2,000 hours of programming in 2005 and saw its revenue increase to £30.7m.

In that time it has owned the rights to children's characters including Barbie, Transformers, Dennis the Menace and The Tweenies. And just over a year ago it acquired the hard-to-spot children's character Where's Wally? in a £2.5m deal designed to reach an older age group beyond the toddlers it targets with Postman Pat and Rupert Bear.

Following the drop in share prices and problems it has had with DVD distribution, it is increasingly likely that the company will face a takeover.

That could mean some of the country's favourite characters being moved to a new home. There is even a danger that a new owner may not want some of them, leading to the possibility that the programmes may be sold off to several buyers.

Rod Bransgrove, chairman of Entertainment Rights, said yesterday that the main aim was to restore faith in the company, thereby providing a safe future for Pat, Basil and Co.

"There is no certainty that an acceptable offer will be made for the company," he said, adding that the board was aware of its responsibilities to shareholders.

"The decision to appoint Nick Phillips as chief executive has been taken to ensure that the company maintains an absolute focus on delivering shareholder value and in re-establishing shareholder confidence," he said.

Commenting on the departure of the company's founder, Mr Bransgrove added: "We should like to thank Mike Heap for his significant contribution to the company's development during his nine years as chief executive and we wish him every success in the future."

Mike Heap paid tribute to the company and its staff: "I have thoroughly enjoyed my nine years as chief executive of Entertainment Rights and wish the company and its dedicated staff every success in the future."

But, despite the turmoil, fans of the popular shows need not worry. A source confirmed that in spite of the current turmoil at Entertainment Rights it is unthinkable that the shows, many of which have a worldwide following, would be allowed to die.