TORONTO — The producer of the popular preschool cartoon Peppa Pig saw its shares soar more than 30 per cent after an American toy titan announced a deal to acquire it for US$4 billion.
Toronto-based Entertainment One. Ltd's shares gained about 1.42 British pounds or 31.94 per cent to 5.85 pounds on the London Stock Exchange.
The lift came after Pawtucket, R.I.-based Hasbro Inc. announced late Thursday it would pay roughly 3.3 billion pounds or 5.60 pounds per common share to acquire the company.
"Hasbro will leverage eOne's immersive entertainment capabilities to bring our portfolio of brands that have appeal to gamers, fans and families to all screens globally and realize full franchise economics across our blueprint strategy for shareholders," said CEO Brian Goldner in a statement.
EOne produces several popular animated kids' shows, including "Peppa Pig" and "PJ Masks." It has several new brands and shows in development, such as "Ricky Zoon" and "Ninja Express."
Hasbro's brands include My Little Pony, Transformers, Power Rangers and Monopoly. The deal would enhance Hasbro's storytelling capabilities in TV, film and other mediums, the company said.
It would also expands Hasbro's Canadian presence.
If approved, eOne's Canadian TV and film operations will continue as a distinct Canadian-controlled business within the combined company, and some of eOne's executives have agreed to join Hasbro.
"Hasbro's portfolio of integrated toy, game and consumer products, will further fuel the tremendous success we've achieved at eOne," said Darren Throop, eOne's CEO, adding that "there’s a strong cultural fit between our two companies."
The boards of directors of both companies have approved the transaction, which is still subject to shareholder approval and other regulatory closing conditions.
EOne's board of directors has recommended shareholders vote in favour of the transaction, which it expects will close in the fourth quarter of this year.
But the share's closing price Friday already surpassed the acquisition offer of 5.60 pounds per share, which represents a 31 per cent premium to the shares' 30-day volume weighted average price as of Thursday.
On Friday, shares traded as high as 6.16 pounds.
— With files from The Associated Press
The Canadian Press