Haim Saban and former Walt Disney Co. Chief Executive Officer Michael Eisner are among parties considering bids for Apax Partners LLP’s HIT Entertainment Ltd., the owner of Thomas the Tank Engine, said people with knowledge of the situation.
Apax is seeking about $1 billion, though bids may come in closer to $500 million, said three people, who asked not to be identified because the matter is private. Eisner is working with buyout firm Madison Dearborn Partners LLC, said the people. Saban, who owns the Power Rangers franchise, is already in discussions about the assets, one person said.
“By definition, it hits some sweet spots for us,” Saban Brands President Elie Dekel said in an interview earlier this month. “You can pretty much bet if there’s transactional activity in the kids space on established brands that we are looking and aware of them. Whether or not we are pursuing or engaged is really on a case by case basis.”
Bank of America Corp., which is working with Apax on the sale, may begin a formal process at the end of the month, two people said. Disney and Viacom Inc., as well as toymakers Hasbro Inc. and Mattel Inc., have also looked at London-based HIT, said the people.
Bidders may seek to buy specific brands, rather than all of the company, one person said. Thomas & Friends, a children’s brand with dozens of steam engine train characters, may represent as much as two-thirds of HIT’s value, the people said.
Apax, the London-based private equity firm that acquired HIT for 489.4 million pounds ($789 million) in 2005, has written down its investment to about zero, the people said. HIT, which also owns the children’s characters Bob the Builder and Barney, had a loss for the year ended July 2009 as its brands faced competition in television shows geared toward pre-schoolers, according to the company’s annual report.
Representatives for Disney, Viacom, Mattel, Apax, HIT, Bank of America, Eisner and Madison Dearborn declined to comment. A Hasbro spokesman didn’t return a phone call.
Disney, the world’s biggest theme-park company, is interested in branding parks with Thomas & Friends, the people said. The Thomas & Friends show was first broadcast in 1984 and has featured former Beatles drummer Ringo Starr and actor Alec Baldwin as narrators.
Eisner, who left Disney in 2005, led an investor group that included Chicago’s Madison Dearborn to acquire Topps Co., the New York-based baseball card and Bazooka bubble gum maker, for $385 million in 2007.
Saban started the Power Rangers characters and bought back that franchise from Disney last year.