Hasbro to acquire Entertainment One in all-cash deal valued at about $4B
Hasbro and Entertainment One announced that they have entered into a definitive agreement under which Hasbro will acquire eOne in an all-cash transaction valued at approximately $4B. Under the terms of the agreement, eOne shareholders will receive GBP 5.60 in cash for each common share of eOne, which represents a 31% premium to eOne's 30-day volume weighted average price as of August 22. Hasbro expects to finance the transaction with the proceeds of debt financing and approximately $1B-$1.25B in cash from equity financing. Hasbro has entered into a debt commitment letter with Bank of America Merrill Lynch to provide a 364-day senior unsecured bridge loan facility to secure funding of the purchase price. Hasbro is committed to maintaining an investment grade rating. Hasbro's long-term leverage target remains unchanged at 2.00 to 2.50X gross Debt to EBITDA and expects to return to this range in three to four years. Hasbro expects to maintain its quarterly dividend and suspend its current share repurchase program while it prioritizes achieving its leverage target. 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.