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ITV rules out a better bid for Entertainment One

The television broadcaster doesn't plan to raise its offer for the film-and-TV distributor
August 31, 2016

Television broadcaster ITV (ITV) has withdrawn its preliminary bid for Entertainment One (ETO), dashing the hopes of investors in the TV-and-film distributor and sending the latter's shares down more than a tenth. ITV's bosses recognise the "strategic logic" and "potential benefits" of a deal, but they place a significantly lower value on the company than its board.

IC TIP: Buy at 221p

ITV offered 236p a share, a premium of about 47 per cent to Entertainment One's share price in the six months to 11 July, when speculation renewed of a tie-up. The target's board unanimously rejected the proposal, claiming it "fundamentally undervalues the company and its prospects". Private-equity group KKR is reportedly mulling its own bid, but is yet to make a formal approach.