Chorion deal to snag 'Thomas' is 'premature'

'No deal is imminent,' sources close to sale confirm to THR

LONDON -- Speculation that British character licensing entertainment company Chorion is closing in on a $700 million deal to acquire global kids character "Thomas the Tank Engine" from Apax Partners is "very premature" according to people involved in the sale.

"No deal is imminent. Plans are all in the very early stages," said the source, pointing out that banking and financial advisors have yet to be appointed to any potential disposal of the global franchise.

That would put an actual timetable quite some way off.

The sale process could take between six months and a year, the source added.

Any sale process is likely to canvas interest from a range of parties including such behemoths as Disney and Fremantle Media, as well as smaller operators like Entertainment One or Chorion, which owns the highly successful "Mister Men" and "Olivia" kids properties, but has no big pre-school boy-focused show.

Owned by British private equity firm Apax Partners, "Thomas and Friends," is part of HIT Entertainment, which also owns "Bob The Builder," "Pingu" and "Barney The Dinosaur."

Although reports of a possible $700 million price tag have to be taken with a huge pinch of salt, the preschool property "Thomas" has all but locked in the 2-6 year boy demographic, and attracts a fair few girls as well.

"I can't speak to the reported price numbers, but "Thomas" is quite unique as a property, it's a classic global franchise and I don't see signs of its popularity waning" says Will Harrison, founder of boutique strategy firm Vicat Media and former head of equity ventures and business development for Walt Disney Co's European television operations.

"It isn't one of those properties that is big in just a few markets, it's an evergreen with a huge business in licensing and merchandising as well as the television and movie content that act as a constant window to keep the brand fresh," he added.

HIT has experienced a bumpy ride in recent years, with a downturn in the DVD market hitting its domestic U.S. business. Earlier this year it renegotiated its $470 million debt with banks after facing a "soft" breach on its loan covenants.

Reps for the companies declined comment.