Movie and television company Entertainment One confirmed Monday it has held talks regarding the possible purchase of Alliance Films, the independent Canadian film distributor behind the Hunger Games movie.
“The board confirms it has held discussions with the shareholders of Alliance Films, but there can be no certainty this will lead to a transaction,” the company said, noting recent speculation about a possible deal.
“In any event, the company would only undertake such a transaction on acceptable terms, and on the basis that the directors believe it would be financially and strategically value enhancing for the company and its shareholders.”
The statement came as Entertainment One reported its results for its latest financial year. The company, founded in Canada but listed in London, earned 16.2 million pounds for the year ended March 31 compared with 3.6 million pounds a year earlier. Revenue improved to 502.7 million pounds, up from 469.7 million pounds.
Entertainment One said if it is able to reach a deal it plans to raise the necessary money to pay for the acquisition through a combination of debt and equity that would be underwritten by a limited group of institutional investors
Last year, Alliance Films bought Lionsgate’s Canadian distribution business Maple Pictures for approximately $38.5 million.
The deal would give Entertainment One control of an 11,000-title film library and distribution rights to films released by Relativity Media in Canada and the United Kingdom, as well as titles from Lions Gate Entertainment, Focus Features, the Weinstein Company and CBS Films in Canada.
Entertainment One is already the distributor for the lucrative Twilight franchise, among other titles.
Alliance Films was formerly part of Alliance Atlantis, which was acquired by Canwest Communications for $2.3 billion in 2007.
Goldman Sachs helped finance that deal and wound up getting control of the film assets when Canwest went bankrupt and sold its newspaper and broadcasting operations to creditors and Shaw Media, respectively.
Investissement Quebec owns a 38.5% stake.
