Peppa Pig owner opts to scrap sale plans

Entertainment One, the company best known for children's TV series Peppa Pig, has scrapped plans to sell the business after not receiving any satisfactory offers.

Shares in the firm, which also distributes the Twilight movies, closed down 17.84% yesterday, despite it forecasting impressive full-year results.

Entertainment One had previously contacted financial organisations to advise on strategic options for the company, including a potential sale or part sale.

However, after receiving various proposals from interested parties, the firm said that none of these "adequately reflect" its expected value, and so it will now focus on growing through acquisitions.

Reuters reports a "person familiar with the situation" as saying that Entertainment One was in early talks over a strategic acquisition, but no further details are known at this stage.

Entertainment One, valued at around £370m, said that Credit Suisse and JP Morgan were evaluating a number of potential acquisitions for the company going forward.

"As part of the company's review of strategic options, the board has considered various proposals that have been made for all or parts of the group and has concluded that these do not adequately reflect the Company's value," said Entertainment One in a statement.

"As such, the Board is no longer considering the outright sale of the business. However, through the continuing review of strategic options, the Board, advised by Credit Suisse and JP Morgan, continues to evaluate a number of acquisition opportunities and further announcements will be made in due course, as required."

The company had hoped that the pull of the Peppa Pig brand would attract potential buyers, particularly after US toy maker Mattel recently acquired HIT Entertainment, owner of pre-school brands including Bob the Builder and Thomas & Friends, in a $680m (£427m) deal.

Peppa Pig is the number one UK pre-school brand, and Entertainment One is planning to launch the toys range in the US in time for the 2012 Christmas season.

In a statement yesterday, Entertainment One said that it expects to report full-year results in line with market expectations and claimed that EBITDA margins had improved.

The Film and DVD distribution division saw its revenues increase 15% last year, while the firm's digital business reported a 100% increase in revenues, helping to offset the "impact of a decline in physical distribution".