UPDATE: Cinetic, the U.S. film financier, and talent agency UTA are currently raising money for a Thomas the Tank Engine movie. Josh Klausner, writer of Shrek the Third, has written the latest draft of the screenplay. Now Apax Partners, the private equity company which hopes to sell Thomas the Tank Engine by spring 2011, wants to get hundreds of millions for the kiddie property. But from whom?
Potential buyers include Disney or a big independent TV producer/distributor like Fremantle, which intends to enter children’s television. Neither Viacom/Nickelodeon, which owns Spongebob Squarepants, nor Turner/Cartoon Network are thought to be keen on buying Thomas; the famous blue engine would not be a good fit for their edgier, older-skewing programming. “As a children’s property, Thomas is running out of steam,” one insider tells me.
But back when Apax last tried to sell Thomas to Disney in 2005, Apax wanted $800M for Thomas, says a source familiar with negotiations. Disney walked away. Since then Disney has started airing the upstart Chuggington TV show, created by former executives at HIT Entertainment, the children’s character company which Apax bought in 2005.
HIT Entertainment stresses that Thomas is still the #1 pre-school brand in the U.S., UK, Australia, and Germany. It currently generates $100 million a year in revenue, compared with less than $50M in 2004. Thomas remains the best performing part of HIT’s portfolio, which includes Barney the Dinosaur and Bob the Builder. Fisher Price recently took over selling the toy range.
Bank of America and Deutsche Bank led a syndicate of around 35 banks that lent nearly $500 million to HIT Entertainment, whose chairman is former BBC boss Greg Dyke. Apax wrote off $507 million from its investment this spring. It has twice had to renegotiate the company’s massive debt load. I’m told that the banks forced Apax to hive off Thomas for separate sale. HIT, though, says Thomas was given its own division “to increase brand focus” — nothing to do with a potential sale.