Millions of people tune in to dramas produced or distributed by Entertainment One (ETO) or broadcasted by ITV (ITV), but real life might be more exciting. The former's board has rejected a preliminary bid of 236p a share from ITV - valuing the business at over £1bn - as it "fundamentally undervalues the company and its prospects". Entertainment One's shares climbed 6 per cent on the news.
A tie-up would bolster ITV's international content and distribution business and diversify it away from volatile advertising revenues. The appeal of popular TV franchises such as Peppa Pig and Grey's Anatomy is also clear, but the strategic value of Entertainment One's unpredictable film business is less obvious. Meanwhile, Entertainment One could benefit from ITV's scale and greater resources, and secure a guaranteed outlet for its productions.