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14 Jul | Entertainment One Moves to London’s Main Board

Back in Mid May of this year – following a prompt from an Investor Trader reader – we took up a speculative tranche of Entertainment One (ETO.L).

Entertainment One is a leading independent entertainment group, with diversified operations incorporating film, television and music across five territories (UK, Canada, US, Holland, Belgium).

We liked what we’d heard so we did a little follow up homework and when Small Company Share Watch (our fave Small Cap tip sheet) went and ran a feature extolling the potential of ETO.L, we just had to take the plunge.

That was in May 2010, the price was 61 pence and there was very strong talk of a move from AIM to London Stock Exchange’s main market.

Fast forward to mid July 2010, two short months later and ETO.L is trading in the range of 77 to 81 pence (though if you were inclined to sell today you may find yourself being offered closer to the latter).

Following on from a couple of shareholder meetings in June, last Friday (9 July 2010), Entertainment One released the following:

Entertainment One Ltd. (“the Company”) is pleased to announce that it has received a final Cayman Court Order sanctioning the scheme of arrangement previously approved by shareholders at a meeting held on 28 June 2010.

The scheme of arrangement is expected to become effective at 5pm BST on 14 July 2010, following which the place of incorporation of the ultimate parent holding company of the Entertainment One group of companies will change from the Cayman Islands to Canada, and all of the ordinary shares of the Company will be exchanged for an equal amount of common shares of Entertainment One Ltd., a newly incorporated Canadian company (“Entertainment One Canada”).

Following the scheme becoming effective, it is expected that at 8am BST on 15 July 2010 the common shares of Entertainment One Canada will be admitted to the Official List and to trading on the London Stock Exchange’s main market for listed securities.

In short, ETO.L has changed names and is off to play with the big boys on the main board.

Ceteris paribus, this should have the effect of creating a little buzz around Entertainment One as it gets a squirt of media coverage and plonks itself on the radar of institutional buyers. Time will tell.

As it stands now we’ve gained 25% on ETO.L in the two months leading up to Friday’s announcement, so anything from here is gravy.

We liked what we saw when we jumped into ETO.L in May and we’re not going anywhere soon. But in a market that’s swinging and swaying like this one, it’s nice to know that you can still make a buck on a speuclative move to the main board.

Thanks again for dropping by and remember over the year’s this has been nothing more than a poorly paying hobby for me. My ranting should never be taken as investment advice, go seek out the professionals for that and always do a ton of homework.

Paul
rsvp@investorsoiree.co.uk