TOP NEWS: Hasbro To Acquire Entertainment One For Over GBP3 Billion

(Alliance News) - Toymaker Hasbro Inc late Thursday said it had agreed to acquire the maker of ...

Alliance News 23 August, 2019 | 6:47AM
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(Alliance News) - Toymaker Hasbro Inc late Thursday said it had agreed to acquire the maker of the Peppa Pig children's TV show Entertainment One Ltd in an all-cash transaction valued at GBP3.3 billion.

Under the terms of the agreement, Entertainment One shareholders will receive GBP5.60 in cash for each share, which represents a 31% premium to the company's 30-day volume weighted average price as of Thursday.

Entertainment One shares closed 1.0% higher in London on Thursday at 442.62 pence each.

Hasbro said the acquisition will advance its position as a global play and entertainment company, adding "beloved" preschool brands to its portfolio.

"This transaction creates significant, immediate value for our shareholders as it recognizes the strength of our future-facing business model," said Allan Leighton, Entertainment One's chair.

"Hasbro's portfolio of integrated toy, game and consumer products, will further fuel the tremendous success we've achieved at Entertainment One," said Darren Throop, chief executive of Entertainment One.

Hasbro expects to finance the transaction with the proceeds of debt financing and USD1.0 billion to USD1.25 billion in cash from equity financing. Hasbro said it has entered into a debt commitment letter with Bank of America Merrill Lynch to provide a 364-day senior unsecured bridge loan facility to secure funding of the purchase price.

Hasbro said it expects to maintain its quarterly dividend and suspend its current share repurchase program while it prioritizes achieving its leverage target.

"Entertainment One's brands and TV and film expertise, together with Hasbro's brands, toy and game innovation and licensing capabilities, positions us to more quickly drive revenue and profit over the medium-term. We remain committed to maintaining an investment grade rating and returning to our gross debt to earnings before interest, taxes, depreciation, and amortization target of 2.00 to 2.50x," said Hasbro Chief Financial Officer Deborah Thomas.

The transaction, which is structured as a statutory plan of arrangement under the Canada Business Corps Act, has been approved by the boards of directors of each of Hasbro and Entertainment One, and is subject to receipt of certain regulatory approvals and the approval by Entertainment One shareholders.

The board of directors of Entertainment One, after consultation with its financial advisors as to the financial terms of the transaction and its legal advisors, unanimously determined that the transaction is in the best interests of the company and has recommended that Entertainment One shareholders vote in favour of the deal.

The transaction is expected to close during the fourth quarter of 2019.

By Evelina Grecenko; evelinagrecenko@alliancenews.com

Copyright 2019 Alliance News Limited. All Rights Reserved.

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Entertainment One Ltd

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