TIDMETO
RNS Number : 3751N
Entertainment One Ltd
24 September 2019
Date: 24 September 2019
On behalf of: Entertainment One Ltd.
(the "Company", "eOne", "Entertainment One" or the "Group")
Embargoed until: 0700 hours
Entertainment One Ltd.
Trading update and publication of circular
1. Trading update
Entertainment One Ltd. ("eOne", "the Company", "Entertainment
One" or "the Group") provides the following update on the Group's
trading performance for the period from 1 April 2019 to 23
September 2019.
Family & Brands
Revenue for the division over the period is anticipated to be
consistent with the prior year period, despite a competitive
preschool merchandise market. Across Family & Brands there are
around 1,600 live licensing and merchandising contracts
globally.
Peppa Pig maintained its momentum in core markets, with the
brand's fifteenth anniversary providing the opportunity for a
number of brand initiatives, including the Peppa Pig Festival of
Fun film released in April/May (featuring 10 never-seen-before
episodes); the 16-track Peppa Pig: My First Album music release
(which recently surpassed 5 million streams globally); the Peppa
Pig's Adventure live show tour which started in September in the
US; and celebratory partnerships with children's charities
including Save the Children, Tommy's and the Muddy Puddle Walk. The
brand also won Best Preschool Licensed Property at the September
2019 UK Licensing Awards, underlining its enduring nature as an
evergreen brand in the territory.
In China, there are currently 62 active Peppa Pig licensing and
merchandising contracts, as eOne prepares for the migration from
agency agreements with licensees to direct relationships with
dedicated Family & Brands managers in the territory. We
continue to roll out additional consumer products with master toy
partner Alpha planning to launch 20 mass market shop keeping units
("SKUs") (of which 16 have already been launched) across its retail
partners in the smaller Chinese tier 3 and 4 cities during calendar
2019, compared to the 16 SKUs it launched during calendar 2018.
This will be supported by product launches in categories such as
food and beverages (over 50 SKUs in the lacto, soya milk and juice
drinks segment), clothing (43 SKUs planned for the current year),
publishing (25 new storybook titles) and home furniture and
kitchenware product rollouts. At the China Licensing Awards 2019
Peppa Pig won the Film/Television/Media Property of the Year in the
animated category. The business remains on track to deliver 117 new
episodes of Peppa Pig to air by 2023.
Merlin Entertainments now has three Peppa Pig World of Play
centres in operation, located in Shanghai, Dallas and Auburn Hills,
Michigan. Attendance continues to build and eOne won the Babytree
Brilliant Awards 2019 Indoor Attraction for the Shanghai location.
In addition, the two Peppa Pig Land formats which opened in March
2018 at Heide Park in Germany and Gardaland in Italy also achieved
robust attendance numbers during the period (4 million visitors to
date), expanding the brand experience of Peppa Pig across its
audiences.
PJ Masks has been fully rolled out across the major global
markets and remains a leading property in Canada and the US, where
the brand was the second largest preschool toy property year to
date to June 2019 according to NPD Group data. Strong additional
broadcast slots beginning this September in key markets like the
US, France, Italy, Spain, UK and Germany are helping to maximise
brand awareness. Coupled with reduced hold-back periods, this
should allow for a more rapid roll out on terrestrial broadcasters
and related exposure during the current quarter in preparation for
the important lead-up to the holiday retail period this year. The
2020 toy range for North America received a very positive reaction
from retailers at the recent LA Toy Previews.
Ricky Zoom made a very strong global broadcast premiere in China
on the Youku SVOD platform during the period, achieving 100 million
views in the first 12 days and reaching the position of number
three ranked pre-school property on the platform (behind Peppa Pig
and local brand Boonie Bears). Confirmed broadcast partners for the
September 2019 launch in the remaining territories around the world
include Nickelodeon (US), Gulli (France), Super RTL (Germany), RAI
(Italy), Discovery Kids (Latin America) and Clan (Spain). These
launches will be accompanied by the availability of the Welcome to
Wheelford companion app and the consumer products launch of the
brand is anticipated to be spring/summer 2020.
Film, Television & Music
Revenues across the division for the period are anticipated to
be slightly lower year on year. Strong growth in Music, supported
by the recent Audio Network acquisition, was offset by a lower
performance in Film and Television which was largely due to
variances in the timing and mix of deliveries compared to the prior
year period.
The scripted television market remains vibrant. Following the
new series commissions highlighted at the year-end, production has
now started on Deputy (for Fox), Nurses (which was commissioned for
season 2 by Global TV in Canada before season 1 has been aired) and
Run (HBO). New drama series recently announced include Philly Reign
(produced in partnership with Mary J Blige for USA Network),
original horror series Red Rose for BBC1 and a pilot for Anna K, a
modern retelling of Tolstoy's Anna Karenina set in New York
City.
As well as announcing new scripted series, eOne has produced a
number of series recommissions. The Rookie was re-ordered by
co-production partner ABC and season 2 is now in production, with
eOne selling the show across 160 territories globally; two hours of
the new series was delivered in the period. Other returning shows
in production include: Mary Kills People (season 4), Cardinal
(season 4) and You Me Her (season 5).
In unscripted television, eOne shows now air five times a week
across different North American networks: Murder in the Thirst
(Sundays on BET), Love and Listings (Mondays on VH1), Ex on the
Beach (Tuesdays on MTV), Strong Man (Wednesdays on History),
Growing Up Hip Hop Atlanta (Thursdays on WeTV). A new four-part
documentary series, Ready for War, was commissioned by Showtime to
examine the cause and effect of deporting US military veterans. The
series was produced in partnership with David Ayer and Chris Long's
Cedar Park, and executive produced by multiplatinum music artist
Drake. The business further expanded its production footprint with
the acquisitions of Daisybeck Studios in the UK (producer of
unscripted shows including The Yorkshire Vet, Springtime on the
Farm, Big Week at the Zoo and Made in Britain) and the US-based
BLACKFIN (producer of Finding Escobar's Millions, I Am Homicide,
Primal Instinct and Bad Henry for a number of major networks and
platforms).
The transition across the Film operations is on track to be
completed this financial year as eOne continues to focus on
production activities. Notable film releases during the period
included Scary Stories to Tell in the Dark, which was released in
the US to a strong box office performance. eOne co-financed the
film with CBS, has distribution in its territories and handled
international sales through Sierra/Affinity. John Wick: Chapter 3 -
Parabellum also performed well in eOne territories, generating box
office revenues of C$15 million in Canada and EUR2.5 million in
Spain.
Looking ahead, Queen and Slim, the first feature from Makeready,
has completed production and is scheduled for release this November
by eOne in its direct territories including the UK and Canada and
by Universal in the US and internationally. eOne also announced
that it will be co-financing two films with Paramount Pictures -
the film of the classic US children's character Clifford The Big
Red Dog and post-apocalyptic thriller Monster Problems. eOne will
be distributing the releases in Canada and the UK and Paramount
will be distributing in the US and the rest of world. eOne is also
preparing for the release of 1917, a World War I epic from output
partner Amblin.
Music has experienced significant growth from both organic
growth and the acquisition of Audio Network in April this year. The
business continued its strategy of diversifying its portfolio
beyond recorded product to include music publishing and artist
management, live touring/exhibition and, most recently, Audio
Network creating music for film and television. The recorded
catalogue from artists such as The Lumineers, Dr. Dre, DJ Khaled
and Snoop Dogg continues to contribute significant margin as the
streaming universe continues to grow. Other eOne artists include
James Fortune, who had the Number One Billboard Gospel Album for
Dream Again, and JJ Hairston and Jonathan McReynolds both of whom
had top five Gospel albums. The Game, Brandy and The Lumineers will
debut albums in the autumn of 2019.
Management client Jax Jones has sustained his radio success with
his latest hit single You Don't Know Me, which has achieved over
500 million streams globally since release. The Group's live
business, Round Room, announced new events during the period: the
Baby Shark Live tour and the Rock the Rink Tour (a national tour
featuring the Canadian Olympic Figure Skating team) and The Nelson
Mandela Exhibit, set to launch in Berlin in October 2019 following
a successful run in London. In addition, it continues to experience
success with the PJ Masks: Time to be a Hero live show with
sell-out dates across the US.
Corporate
The annual independent library valuation has been completed and
the value of the Group's library assets has increased to US$2.1
billion as at 31 March 2019 (2018: US$2.0 billion). The value of
the library has been impacted by more volatile foreign exchange
movements than in previous years (predominantly the devaluation of
the British Pound), but at constant currencies the 2019 valuation
of the library would have increased by an additional US$100
million. The library valuation does not include library assets
acquired as part of the Audio Network transaction.
2. Transaction and Publication of Circular
On 22 August 2019, eOne and Hasbro, Inc. ("Hasbro") announced
that they had entered into an arrangement agreement involving,
amongst other things, the acquisition by a subsidiary of Hasbro of
all the outstanding common shares of the Company (the "Common
Shares"). The acquisition will be structured as a statutory plan of
arrangement (the "Arrangement") pursuant to section 192 of the
Canada Business Corporations Act.
The consummation of the Arrangement is subject to satisfaction
or waiver of certain conditions, including, among other things, the
approval of a special resolution with respect to the Arrangement
(the "Arrangement Resolution") by at least two-thirds of the votes
cast by shareholders of the Company ("Shareholders"), represented
in person or by proxy at the Annual General and Special Meeting
(the "Meeting"), to be held on 17 October 2019, see "Upcoming
Shareholder Meeting" below. The Arrangement also requires the
approval of the Ontario Superior Court of Justice (Commercial
List). In addition to Shareholder and court approvals, the
Arrangement is subject to receipt of certain foreign investment and
antitrust approvals and the satisfaction of other closing
conditions customary in transactions of this nature.
Upon the completion of the Arrangement, Shareholders will become
entitled to receive:
for each Common Share GBP5.60 in cash
(the "Consideration") in accordance with the terms of the
Arrangement Agreement and Plan of Arrangement in respect of the
Arrangement. See "The Arrangement" in the accompanying management
proxy circular (the "Circular") for further details in relation to
the Consideration.
The Consideration to be received by Shareholders pursuant to the
Arrangement represents a premium of approximately:
-- 31% over the Company's 30-day volume-weighted average trading
price as of 22 August 2019, the last trading day before the public
announcement of the Arrangement; and
-- 26% to the Company's last trading price on 22 August 2019.
Subject to obtaining court and other regulatory approvals, and
the satisfaction or waiver of all other conditions precedent to the
Arrangement, including Shareholders' approval of the Arrangement
Resolution at the Meeting, it is anticipated that the Arrangement
will be completed during the fourth quarter of 2019.
If the Arrangement becomes effective, it will be binding on all
Shareholders, irrespective of whether or not they attended or voted
at the Meeting.
Under the Arrangement Agreement, the Company has agreed to pay a
termination fee to Hasbro totaling GBP29,031,569 if the Arrangement
Agreement is terminated in certain circumstances (as permitted
under the Listing Rules of the Financial Conduct Authority
("FCA")).
Further details in relation to the Arrangement and the Meeting,
as well as the potential benefits, risks and uncertainties taken
into consideration by the board of the Company, are set out in the
Circular, which will today be mailed to Shareholders.
3. Upcoming Shareholder Meeting
The Meeting will be held at the offices of Osler, Hoskin &
Harcourt LLP at 100 King Street West, 1 First Canadian Place, Suite
6300, Toronto, Ontario, Canada on Thursday, 17 October 2019 at
11:00 a.m. (Toronto time) / 4:00 p.m. (London time). The notice
convening the Meeting is set out on pages 4 to 7 of the
accompanying Circular. The Circular contains a detailed description
of the Arrangement and other information relating to the Company
and Hasbro. A copy of the circular will be available on the
Company's website www.entertainmentone.com and will be mailed to
the Shareholders along with other important proxy materials,
including a form of proxy and a letter of transmittal. We urge you
to consider carefully all of the information in the Circular and
other proxy materials. If you require assistance, please consult
your financial, legal, tax or other professional advisors. If you
have any questions with regard to the procedures for voting or
completing your transmittal documentation, please contact
Georgeson, the Company's proxy solicitation agent, by telephone at
+44 (0) 207 019 7032 or by email at ETOoffer@georgeson.com.
The principal purpose of the Meeting is for Shareholders to
consider and, if thought advisable, approve, with or without
variation, the Arrangement Resolution. As the Meeting is both an
annual and special meeting, in addition to the Arrangement
Resolution, Shareholders will also be asked to vote on the regular
business items of the Company at its annual general meeting,
including the election of directors to the board of the Company)
and the appointment of auditors, as well as certain other business
of the Company as described under "Annual Business" in the
Circular.
Subject to the terms of the Arrangement Agreement and any
applicable order of the Court, and if the Arrangement Resolution is
approved by Shareholders at the Meeting in the manner required by
the Interim Order, the Company intends to make an application to
the Court for the Final Order. A copy of the Notice of Application
in respect of the hearing of the Company's application for the
Final Order is attached as Schedule E to the Circular. The hearing
of the Company's application for the Final Order is expected to
take place at 10:00 a.m. (Toronto time) on 21 October 2019 at 330
University Avenue, Toronto, Ontario, or at any other date and time
as the Court may direct.
The Arrangement will only become effective if all other
conditions precedent to the Arrangement set out in the Arrangement
Agreement, including Competition Act Approval, HSR Act Approval,
Investment Canada Act Approval and Other Merger Control Approvals
(as each such term is defined in the Circular,) have been satisfied
or waived. For a description of the conditions precedent, see "The
Arrangement Agreement - Conditions Precedent to the Arrangement" in
the Circular and Schedule C to the Circular, which includes the
Arrangement Agreement.
4. Delisting of Common Shares
Prior to the Arrangement becoming effective, the Company intends
to make applications to the FCA for the cancellation of the listing
of the Common Shares on the Official List of the FCA and to the
London Stock Exchange ("LSE") for the cancellation of the admission
to trading of Common Shares on the main market of the LSE. It is
expected that such delisting and cancellation of admission to
trading would take effect on or shortly after the effective date of
the Arrangement (the "Effective Date").
The last day of dealings in, and registration of transfers of,
Common Shares on the LSE is expected to occur as soon as
practicably permitted on or after the Effective Date, which is
expected during the fourth quarter of calendar year 2019, and the
Common Shares will be cancelled from the Official List of the FCA
and from the LSE's main market for listed securities shortly
thereafter.
5. Information on the Company
The Company is a global independent studio that specialises in
the development, acquisition, production, financing, distribution
and sales of entertainment content. The Company's diversified
expertise spans across film, television and music production and
sales; family programming, merchandising and licensing; digital
content; and live entertainment. Through its global reach and
expansive scale, powered by deep local market knowledge, the
Company delivers the best content to the world.
The Company's robust network includes international feature film
distribution company Sierra/Affinity; Amblin Partners with
DreamWorks Studios, Participant Media, and Reliance Entertainment;
Makeready with Brad Weston; unscripted television production
companies Whizz Kid Entertainment, Renegade 83, Daisybeck and
Blackfin; live entertainment leaders Round Room Live; world-class
music labels Dualtone Music Group and Last Gang; innovative music
platform Audio Network; and award-winning emerging content and
technology studio Secret Location.
Enquiries:
Alma PR Rebecca Sanders-Hewett +44 (0)20 3405 0205
Joe Sparacio
Entertainment One Ltd. Patrick Yau +44 (0)20 3714 7931
IMPORTANT NOTICE
Not for release, publication or distribution in, into or from
any jurisdiction where to do so would constitute a violation of the
relevant laws or regulations of such jurisdiction.
Forward-Looking Statements
Certain statements in this announcement contain "forward-looking
statements" with respect to Entertainment One within the meaning of
the Private Securities Litigation Reform Act of 1995. These
forward-looking statements may be accompanied by such words as
"anticipate," "believe," "could," "estimate," "expect," "forecast,"
"intend," "may," "plan," "potential," "project," "target," "will"
and other words and terms of similar meaning. Among other things,
these forward-looking statements include expectations concerning
the proposed acquisition of Entertainment One; the expected
timetable for completing the acquisition; and benefits and
synergies of the transaction and future opportunities for the
combined company. Entertainment One's actual actions or results may
differ materially from those expected or anticipated in the
forward-looking statements due to both known and unknown risks and
uncertainties. The statements contained herein are based on
Entertainment One's current beliefs and expectations and speak only
as of the date of this announcement. Except as may be required by
law, Entertainment One does not
undertake any obligation to make any revisions to the
forward-looking statements contained in this announcement or to
update them to reflect events or circumstances occurring after the
date of this announcement. You should not place undue reliance on
forward-looking statements.
No profit forecasts or estimates
No statement in this announcement is intended to be or is to be
construed as a profit forecast or profit estimate.
No offer or solicitation
This announcement is provided for informational purposes only
and does not constitute an offer to sell, or an invitation to
subscribe for, purchase or exchange, any securities or the
solicitation of any vote or approval in any jurisdiction, nor shall
there be any sale, issuance, exchange or transfer of the securities
referred to in this announcement in any jurisdiction in
contravention of applicable law.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
MSCLJMBTMBTTTTL
(END) Dow Jones Newswires
September 24, 2019 02:01 ET (06:01 GMT)
Entertainment One (LSE:ETO)
Historical Stock Chart
From Apr 2024 to May 2024
Entertainment One (LSE:ETO)
Historical Stock Chart
From May 2023 to May 2024