that the appointment of a bank to manage the sale process is expected soon. It follows yesterday's media reports that HIT's private equity owner Apax is close to appointing UBS or Bank of America Merrill Lynch after shortlisting the two banks.
The reports suggest a strong price for the deal, as much as $1.5 billion (£950 million), a figure that represents the level of interest not just from media groups, such as Disney and Viacom, but also toy companies like Mattel and Hasbro. Stories have been circulating for almost a year that Thomas and Friends, the jewel in HIT's crown, would be sold separately, but now it is reported that Apax hopes to sell the entire business, which also includes Fireman Sam, Angelina Ballerina and a catalog of more than 1,500 hours of children's programming. HIT has also recently announced its first new homegrown preschool property in some time Mike the Knight and has talked about a substantial development pipeline of new content.
which cited a number of potential buyers, including Comcast, Nickelodeon, Disney, Hasbro, Fremantle, Classic Media, Saban and Endemol.
Apax acquired HIT for £489.4 million ($781.3 million) in May 2005. Earlier this year, it was forced to write down £325 million ($519 million) of HIT's value in order to secure an agreement with lenders. The write-down saw HIT record a pre-tax loss of £361 million ($576 million) for the year to July 2009, but won Apax an extension of its credit facilities until June 2012. It also agreed to pay higher interest on its £356 million ($568 million) of remaining debt.
Fisher-Price's Thomas and Friends toys have been performing very well since their launch last year and sales of Thomas merchandise are reported to be up 50 percent this year in the U.S. Perhaps even more significant for potential buyers, Thomas is now the No. 1 Western preschool toy in China and Japan. Fireman Sam has also begun to see strong international performance.
HIT also owns a 30 percent stake in digital cable television channel PBS Sprout, which could prove attractive to bidders.
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