There was widespread speculation that TV and film rights business Entertainment One (ETO) was about to engage in corporate activity in the wake of a poorly received refinancing earlier this month (4 Dec).
An extension of its output agreement with DreamWorks Pictures is therefore hardly a surprise even if its does provide a useful fillip to the shares - up 4.2% to 177p. It teams up with industry heavyweights, including Steven Spielberg, as it joins new film, television and digital content creation company - Amblin Partners.
The company, which has the rights to children's TV favourites Peppa Pig and distributes high profile titles like the Hunger Games series (pictured), will handle distribution for the venture in a number of territories including the UK, Spain, Australia and New Zealand and also takes a small equity stake in Amblin. No details are given on the financial implications of the deal but analysts are broadly positive.
JP Morgan reiterates its 'outperform' rating and comments: 'we think the partnership with such successful producers should also add to the quality of EOne’s business and potential for increased earnings over time.'
Peel Hunt's Malcolm Morgan stays at 'buy' with a 200p price target but is a little more circumspect. 'This deal supersedes a previous arrangement. The net impact will be relatively modest at this stage.
'The company is silent on the scale of the equity stake or its cost. Overall a small positive item today after a torrid few weeks of adverse trading and financing news flow.'