Questor share tip: LoveFilm deal puts Entertainment One in pole position to mop up more Amazon business Entertainment One 136.5p +1p Questor says Buy The cartoon character's owner, film and television distributor Entertainment One, has seen its shares drop from around the 155p mark to below 130p amid rumours that it is looking at buying one of its Canadian peers, Alliance Films. Analysts have concerns about Entertainment One's ability to fund the deal, and their doubts were confirmed yesterday as chief executive Darren Throop confirmed that the company would have to place more shares to get the potential acquisition over the line. But while this all sounds like good reason to take a dim investment view on the company, yesterday's share rise suggests the potential bid has already been priced in. Meanwhile, a more than 100pc surge in full year pre-tax profits and steady growth of Entertainment One's digital revenues point to a healthy underlying business, and a good opportunity to buy. Investec warned that the Alliance discussions could "hold back progress of the shares in the near term [but] that they look good value following their recent drift." At Northland Capital Partners, analysts were upbeat about Entertainment One's "good strategic fit" with Alliance, and its "strong underlying performance." Many traditional media companies have taken a hammering in recent years thanks to the onset of digital services, but Entertainment One is faring better than most. Lucrative deals such as its five-year licensing arrangement with Amazon's on-demand service, LoveFilm, are replacing a slump in traditional DVD sales. What's more, the LoveFilm deal puts Entertainment One in pole position to mop up more Amazon business when it extends into new territories.