The British children’s rights company, whose kids’ properties include the Nick Jr show Olivia, is set to bid for Thomas the Tank Engine. The bidding process has yet to begin though. Apax Partners, the private equity company which hopes to sell Thomas by spring 2011, wants $700 million (£440 million) for Thomas, according to the Daily Telegraph. That’s double what Apax paid for the children’s property back in 2005, I’m told. When Apax last tried to sell Thomas to Disney it wanted $800 million for the little engine, one insider tells me. Disney walked away. Other potential buyers include Disney (again) or a big independent TV producer/distributor like Fremantle, which wants to get into the children’s TV market. Thomas is still the #1 pre-school brand in the U.S., UK, Australia, and Germany. It generates $100 million a year in revenue, compared with less than $50 million in 2004. Yet HIT made a pre-tax loss of $569 million for the year to July 2009, wiping out the value of Apax’s original £489.4 million investment. Ironically, it was HIT Entertainment which tried to buy Chorion back 4 years ago. Yet there is a question mark as to whether Chorion chairman Lord Alli – a big hitter here in Labour Party circles — can rely on his backer 3i to fund his Thomas acquisition. Equity investor 3i bought Chorion for £111 million in 2006. Chorion’s children’s profits slid 4% in the year to March 31 to £21.5 million. “Lord Alli would have to show how he’s regenerated his existing children’s portfolio of Mr Men and Noddy, which he’s failed to do,” says one insider.
Chorion also owns the rights to crime authors Raymond Chandler and Georges Simenon. What’s sad is that it doesn’t seem to have done anything with either of these properties. Back in 2007, there was talk of Clive Owen starring in a Sin City-style remake of Chandler’s Philip Marlowe but nothing seems to have happened. Simenon’s world-weary detective Inspector Maigret has also languished. Revenues at Chorion’s crime division fell by 7% to £18.9 million, held up by ITV’s ongoing series of Agatha Christie TV movies.
Yet Lord Alli has talked about floating Chorion back on the stock market as early as 2011. EBITDA was up 11% this year to £14.9 million. This Fall the BBC begins showing Octonauts, a 50-episode cartoon which the company pitches as an underwater Star Trek for pre-schoolers, with a full Fisher-Price toy tie-in.