Canada's Entertainment One, the owner of children's TV brand Peppa Pig, said it had rejected a £1 billion (€1.17 billion) takeover offer which, according to a source, came from broadcaster ITV.
"The board of eOne has reviewed the proposal and has unanimously rejected it on basis that it fundamentally undervalues the company and its prospects," it said in a statement.
ITV, Britain's biggest free-to-air commercial broadcaster, has been buying production companies, particularly in the drama and reality TV genres, to reduce its reliance on British broadcast advertising revenues.
It has been pursuing eOne since March at least, according to reports.
The proposal priced at 236 pence a share represents a 19% premium on eOne's opening share price yesterday.
Analysts at Investec said last month that with more than 80% of sales outside Britain, the company looked relatively attractive given concerns over the value of sterling and British economic risks after the vote to leave the European Union.
They raised their price target to 245 pence a share, based on their estimates for the year to end-March 2017, when they saw pretax profit rising to £119.2m from £100m for the previous year.
Shares in Entertainment One closed at 217.5 pence yesterday.
