Entertainment One surges on improved ITV bid hopes

Shares in Entertainment One were surging on Monday morning on reports that ITV might improve its bid for the Canadian TV and film distributor.

ITV was understood to be working on lifting its previous bid for eOne, which is the majority owner of the maker of the enormously popular Peppa Pig brand and distributor of the new Ricky Gervais movie was 'David Brent: Life on the Road', from 236p-per-share to 280p, valuing the deal at almost £1.2bn, according to the Mail on Sunday.

However, the bid could face a potential counter approach by US private equity colossus KKR, owner of the UK's Trainline website and Toys R Us retail chain.

KKR had not yet reached a final determination and might still decide against such course of action, Bloomberg sources said.

Moreover, City analysts suggested either bid could find eOne's use of Canadian tax incentives a hurdle, the Telegraph reported.

Shares in ETO were up almost 7% to 254.79p by 0840 BST on Monday, while ITV was down 1% to 198.2p.