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The
fund could also push for a share buyback if the company does not
act on its demands, made in January, to slow down the pace of
acquisitions and improve cash flow, Livermore Managing Director
David Neuhauser said in an interview.
Some investors have been concerned that the Toronto-based
company, which has made several acquisitions and formed joint
ventures in recent years, was focusing more on sales growth than
its balance sheet. It said last year it was acquiring a majority
stake in Astley Baker Davies, producer of the popular preschool
franchise Peppa Pig.
Neuhauser said he would like to see more board members with
media or capital markets experience and might be prepared at
some point to propose alternative director nominees.
"That's one area of severe weakness. There's no one on the board
to counter the current management's strategy," he said. "You
don't want a rubber stamp board. You want people who can push
back."
Entertainment One declined to comment, as did its biggest
shareholder, the Canada Pension Plan Investment Board (CPPIB).
Neuhauser declined to say what percentage stake Livermore held
in the company. The fund was not on the list of Entertainment
One's top 10 shareholders compiled by Thomson Reuters.
Neuhauser's remarks came about a month after media reports said
UK-listed Entertainment One was in talks to be acquired by UK
television network ITV. The company said it did not receive an
approach from ITV.
Entertainment One's 10-member board includes several lawyers,
two directors with retail industry experience, and a CPPIB
managing director, according to its website. One board member,
Mark Opzoomer, has served as a top executive and director of
several media companies.
Board Chair Allan Leighton, a high-profile UK retail veteran, is
also the chair of retailer Co-operative Group, deputy chair of
jewelry retailer Pandora and a former chief executive of Asda,
Wal-Mart Stores Inc's British supermarket chain.
Making adjustments to the board would boost investor confidence,
said Neuhauser. The shares are "very undervalued" and the media
sector is ripe for consolidation, he added.
Entertainment One's stock has fallen about 38 percent in the
past year. It has a market capitalization of $1.1 billion.
Entertainment One has partnerships with media companies
including DreamWorks Studios and production company Mark Gordon
Co.
(Reporting by John Tilak; With additional reporting by Matt
Scuffham in Toronto; Editing by Richard Chang)
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