eOne: Fremantle, Lionsgate & Legendary In Pursuit Of Hasbro Company As Sale Process Enters Final Stage

EXCLUSIVE: Hasbro has narrowed down the field for its eOne subsidiary to a handful of suitors, sources tell Deadline. We hear fellow indie studios Lionsgate, Fremantle and Legendary (with Apollo) are in the running to acquire a majority stake in eOne. We hear there also may be 1-2 additional bids from private equity players; Hasbro previously sold eOne’s music business to private equity firm Blackstone in 2021 for $385 million. (Blackstone and company-backed Candle Media are not believed to be in the mix for eOne.) A reps for Hasbro said that the company has no update at this time; Fremantle, Lionsgate and Legendary had no comment.

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We hear a round of presentations is scheduled for the upcoming week as potential buyers hone in their final pitches. According to sources, the process has been robust, with solid bids for the assets that have been put up for sale by the toymaker — all scripted and unscripted TV production (except for the Family Brands division housing such staples as Peppa Pig and PJ Mask), all film production and related global distribution, as well as a 6,500+ title content library and Hasbro’s interest in eOne’s Canadian film and TV business.

Last month, Hasbro CEO Chris Cocks sounded bullish in his comments on the proceedings, which the company kicked off in November when it announced the plan to sell eOne.

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

While the process is very active and some sources are hinting that a decision could come as early as end of this month, others are more cautious, pointing to a longer final stretch. That also was the timeframe Cocks provided last month.

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

That would push the sale past the March 31 release of one of eOne’s biggest film efforts ever, Dungeons & Dragons: Honor Among Thieves (co-produced and co-financed with Paramount), which is getting promising early feedback and facing lofty box-office expectations. Meanwhile, eOne’s high-profile Dungeons & Dragons live-action TV series recently landed a Paramount+ series order. It is unclear how involved eOne will be in Hasbro IP-driven projects after the sale.

Hasbro bought eOne in 2019 for $4B when the company was divided into three divisions: Music, which has been sold, Family Brands, which Hasbro has rolled into its brands licensing and merchandising operation, and Film and TV, which is being put up for sale.

A possible acquisition by Fremantle, Lionsgate or Legendary would fit into each of these companies’ ongoing efforts to scale up.

Fremantle is in the middle of a major M&A push.

The American Idol producer has spent around $270M on 11 companies over the last couple of years including Holey Moley producer Eureka, Normal People producer Element Pictures, Italian producer Lux Vide, which is behind Patrick Dempsey drama Devils, and 72 Films, which is behind Amazon’s James Bond reality series 007’s Road to a Million.

Lionsgate, which is gearing up for the release of the latest installment in the hit John Wick franchise, is in the process of spinning off its film and TV studio from Starz, which is expected to be completed by the end of its fiscal second quarter in September.

As Lionsgate is facing a future as a rare pure-play, publicly traded content company post-spinoff, the studio, with its 18,000-title library assembled by CEO Jon Feltheimer, is looking to bulk up in order to gain leverage in a competitive marketplace. The company has not made major acquisitions in the film/TV production area in a decade, since the purchases of John Wick studio Summit Entertainment for $413M in 2012 and reality juggernaut Pilgrim Media Group for $200M in 2015. (It most recently bough a 50% stake in management/production company 3 Arts in 2018.)

In announcing a $760 million equity investment in Legendary a year ago, Apollo Private Equity partners Aaron Sobel and Lee Solomon noted that “we also see compelling M&A opportunities ahead,” indicating that they would be seeking to beef up the indie studio by asset acquisitions. Legendary, which has not made a major M&A move since, is currently working on new installments in two of its biggest franchises, Dune and Godzilla/Kong.

The pursuit of eOne is driven largely by potential buyers’ interest in acquiring revenue and library titles.

While releasing its fourth quarter financial results last month, Hasbro revealed that film and TV revenue was $310.6M, although for sale purposes this also includes some properties, such as Peppa Pig and Transformers, that will not be part of a deal.

And then there is the library, an asset that has become increasingly valuable in the multi-platform TV universe.

Fremantle, for instance, has been ramping up its move into FAST Channels, or ad-based streaming, so bringing in more library content as part of a comedy acquisition would help populate these services.

Hasbro’s acquisition of eOne was part of the strategic vision of former CEO Brian Goldner, who died in 2021. He had been looking to expand the company beyond toys and games and turn it into a TV and film powerhouse. The marriage has not been a harmonious one, though, with many investors growing restless because the volatile nature of film and TV hasn’t always meshed well with toys and games. The likely outcome is that Hasbro will sell a majority stake in eOne, enabling it to retain some equity but also clearing the financials off the balance sheet.

Toronto-based eOne is behind recent award-winning films like The Fabelmans and The Woman King and breakout TV series like Yellowjackets and The Rookie franchise. Through the 2019 acquisition of the Mark Gordon Company, the studio took over the producer’s interest in TV juggernauts like Grey’s Anatomy and Criminal Minds.

In addition to series eOne has produced (the list also includes Designated Survivor, Cruel Summer and Sharp Objects), the company continues to distribute third-party titles, an important source of revenue for television companies. Such titles include Hulu’s Fyre Fraud and Tiny Shoulders: Rethinking Barbie and CNN’s Tricky Dick.

Dade Hayes contributed to this report.

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