Entertainment One drops DHX purchase

Canadian distributor to go it alone in quest for TSX listing

LONDON -- Canadian distributor Entertainment One shelved plans Thursday for its reverse takeover of rival DHX Media in a bid to secure a coveted listing on the Toronto Stock Exchange.

E1, already trading in London on the AIM market, said it planned to pay about CAN$68 million ($65.7 million), or CAN$1.59 ($1.54) per share, for Halifax-based DHX in September.

But E1 told AIM on Thursday that it has scrapped the takeover and plans to go it alone in its quest to list on the TSX.

The proposed transaction was expected to close no later than Jan. 31. It has been dropped, though, because "senior lenders to the company indicated that consent for the proposed transaction would not be attainable under the original terms and timetable."

Consent of E1's senior lenders was a condition precedent to closing.

E1 requested an extension beyond Jan. 31, but the request fell on deaf ears and was rejected by DHX.

E1 CEO Darren Throop said in a statement to the U.K. stock exchange that his company "continues to work toward achieving a primary listing on the TSX in the current financial year."

He added that E1's four-year, $150 million senior credit facility, secured recently with JP Morgan, "also continues to provide the company with access to additional capital for continued future growth in line with our strategy."

E1's most recent film release, "Twilight," opened in Canada last month and is set to roll out in the U.K. on Dec. 19.