Shares in Entertainment One surged by as much as 31% on Friday to an all-time record level, with analysts pointing to the potential synergies between the two companies.
Under the terms of the deal, which will see Hasbro become a major media player, Entertainment One shareholders will receive £5.60 per share, or around 26% more than Thursday’s closing price.
In addition to the wildly successful Peppa Pig franchise, which encompasses an animated TV series and a whole suite of toys, Entertainment One also owns PG Masks, an animated superhero TV show that airs on the Disney channel.
Noting that the acquisition would provide a “pipeline” of family-oriented products, Hasbro CEO Brian Goldner said his company would leverage Entertainment One’s “immersive entertainment capabilities.”
Beyond the well-known Monopoly board game, Hasbro is also behind toy products like My Little Pony, Twister, the Power Rangers, and Transformers.
Darren Throop, the CEO of Entertainment One, said there was “a strong cultural fit between our two companies.”
“Hasbro’s portfolio of integrated toy, game, and consumer products, will further fuel the tremendous success we’ve achieved,” he said.
Until now, and even as it successfully turned its key brands into TV shows, Hasbro has had to largely outsource its production capabilities. The acquisition of Entertainment One will give it a fully fledged in-house TV unit.
“Hasbro is the master of a milking a brand to sell all types of merchandise and so it is the perfect owner of Entertainment One, which boasts an ever-increasing portfolio of popular children’s brands seen on the screen and on the shelves,” Russ Mould, investment director at AJ Bell, said in a note on Friday.
“Hasbro property Transformers existed as toys before it became a cartoon and a series of films. Entertainment One’s model has been the opposite, preferring to use TV characters to build awareness before launching merchandise.”