Hasbro will acquire eOne in an all-cash transaction valued at approximately £3.3 billion ($4 billion).
Hasbro expects to finance the transaction with the proceeds of debt financing and approximately $1 billion to $1.25 billion in cash from equity financing. Hasbro has entered into a debt commitment letter with Bank of America Merrill Lynch to provide a 364-day bridge loan facility to secure funding of the purchase price.
“The acquisition of eOne adds beloved story-led global family brands that deliver strong operating returns to Hasbro’s portfolio and provides a pipeline of new brand creation driven by family-oriented storytelling, which will now include Hasbro’s IP,” said Brian Goldner, Hasbro chairman and chief executive officer. “In addition, Hasbro will leverage eOne’s immersive entertainment capabilities to bring our portfolio of brands that have appeal to gamers, fans and families to all screens globally and realize full franchise economics across our blueprint strategy for shareholders. We are excited to welcome eOne’s talented employees from around the world into the Hasbro family.”
eOne’s Canadian TV and film operations will continue as a distinct Canadian-controlled business within the combined business
Leveraging talented executive team across all areas of entertainment and strong Canadian presence. Top eOne executives have agreed to join the Hasbro team.
The cash purchase price of £5.60 ($7.34) per share represents a 31% premium to eOne’s 30-day volume weighted average price (VWAP) as of August 22, 2019.
The transaction, which is structured as a statutory plan of arrangement under the Canada Business Corporations Act, has been approved by the boards of directors of each of Hasbro and eOne, and is subject to receipt of certain regulatory approvals, the approval by eOne shareholders and the Ontario Superior Court of Justice and other customary closing conditions. eOne is subject to customary non-solicitation provisions under the definitive agreement and a termination fee payable to Hasbro in certain circumstances. The transaction is expected to close during the fourth quarter of 2019.
eOne’s board of directors has received a fairness opinion from J.P. Morgan Cazenove. Centerview Partners is serving as financial advisor to Hasbro, and Cravath, Swaine & Moore, Stikeman Elliott and Freshfields Bruckhaus Deringer are serving as its legal counsel. J.P. Morgan Cazenove is serving as financial advisor to eOne and Osler, Hoskin & Harcourt LLP and Mayer Brown International are serving as its legal counsel.