eOne: Fremantle, Lionsgate & Legendary follows Hasbro Company as the sale process enters the final stages

EXCLUSIVE: Hasbro has narrowed the field for its eOne subsidiary to a handful of applicants, Deadline sources say. We’ve heard that fellow indie studios Lionsgate, Fremantle and Legendary (with Apollo) are in the running to acquire a controlling stake in eOne.

We hear there could also be an additional offer or two from private equity players; Previously, Hasbro sold eOne’s music business to private equity firm Blackstone for $385 million in 2021. (Blackstone and Candle Media, which is backed by the company, are believed to be out of the mix for eOne.) A Hasbro representative said the company doesn’t have an update right now; Fremantle, Lionsgate and Legendary had no comment.

A round of offers is scheduled for the coming week when potential buyers come home for their final stands, we hear. According to sources, the process was robust, with solid offers for the toymaker’s assets for sale, including all scripted and unscripted TV productions (except for the Family Brands division, which houses staples such as Peppa Pig and PJ Mask). ), all film production and related worldwide distribution and a library of more than 6,500 titles, and Hasbro’s interest in eOne’s Canadian film and television business.

Hasbro CEO Chris Cocks expressed optimism last month about the process the company set in motion in November by announcing its plan to sell eOne.

“Our sales process for the majority of eOne Film and TV is well underway with strong interest in these valuable assets,” he said.

Although the process is very active and some sources suggest that a decision could come as soon as later this month, others are more cautious and point to a longer final trajectory. That was also the time frame Cocks gave last month.

“We expect an update in the second quarter,” he said.

This will boost sales beyond the March 31 release of one of eOne’s biggest film projects. Dungeons & Dragons: Honor Among Thieves (co-produced and co-financed with Paramount), which is receiving promising early feedback and high box office expectations. Meanwhile, eOne is making headlines Dungeons and Dragons Live TV series recently received a deal for the Paramount+ series. It’s unclear how much of a stake eOne will have in Hasbro’s IP-driven projects after the sale.

Hasbro bought eOne for $4 billion in 2019 when the company split into three businesses: music, which sold; Family Brands, which Hasbro integrated into its brand licensing and merchandising business; and film and television.

A potential acquisition by Fremantle, Lionsgate or Legendary would fit into those companies’ ongoing scaling efforts.

Fremantle is in the midst of a major M&A push. The american idol The manufacturer has spent about $270 million on 11 companies in recent years, including Holy Moly producer Eureka; normal people producer Element Pictures; Italian producer Lux Vide, behind Patrick Dempsey’s drama diabolical; and 72 Films, which is behind Amazon’s James Bond reality series 007’s way to a million.

Lionsgate is preparing to release the latest installment of its hit John Wick franchise, is in the process of separating its film and television studio from Starz. This deal is expected to close by the end of the fiscal second quarter in September.

With Lionsgate poised for a future post-spin as a rare pure, publicly traded content company, the studio is looking to expand its 18,000-title library curated by CEO Jon Feltheimer to compete in a highly competitive market. . The company hasn’t made any major film and television production purchases in a decade since it bought Summit Entertainment for $413 million in 2012 and reality star Pilgrim Media Group for $200 million in 2015. management/production company 3 Arts in 2018.)

Aaron Sobel and Lee Solomon, partners at Apollo Private Equity, announced a $760 million investment in Legendary a year ago, noting that “we also see attractive mergers and acquisition opportunities ahead,” suggesting that they the indie- studio will try to expand by acquiring assets. Legendary, which hasn’t made a major M&A move since then, is currently working on new installments across two of its biggest franchises, dune and Godzilla/Kong.

The push for eOne is largely driven by potential buyers’ interest in increasing revenue and library titles.

When it released its fourth-quarter financial results last month, Hasbro announced that its film and television earnings were $310.6 million, although that included the sale of certain properties, such as an office building, for divestiture purposes. Peppa pig And transformersit will not be part of an agreement.

And then there’s the library, an increasingly valuable asset in the cross-platform TV universe.

For example, Fremantle has accelerated its move to FAST channels or ad-based streaming, so bringing in more library content as part of a comedy acquisition would help fill those services.

Hasbro’s acquisition of eOne was part of the strategic vision of former CEO Brian Goldner, who died in 2021. He wanted to expand the company beyond toys and games and make it a television and film powerhouse. However, the marriage was not harmonious as many investors became uneasy as the volatile nature of film and television did not always mesh well with toys and games. The likely outcome is that Hasbro will sell a majority stake in eOne, allowing it to retain some equity but also take the finances off the balance sheet.

Toronto-based eOne is behind recent award-winning films such as The Fables And The queen of women and groundbreaking TV series such as Yellow jackets And The beginner Franchise. With the acquisition of the Mark Gordon Company in 2019, the studio saw producers’ interest in TV juggernauts such as Grey’s Anatomy And criminal spirits.

In addition to series, eOne produced (the list also includes Designated Survivor, Brutal Summer And sharp objects), the company continues to distribute third-party titles, a major source of revenue for television companies. One of those titles is Hulus fire fraud And Small Shoulders: A New Look at Barbie and CNNs Hard ass.

Dade Hayes contributed to this report.