Entertainment Rights Plc ("ER"), the largest specialist supplier of children's and family programming to UK broadcasters by distribution turnover, is pleased to announce that the Company has conditionally agreed to acquire the entire issued share capital of Classic Media Holdings, Inc. for a total consideration of US$210.0 million (£106.9 million).

Classic Media Holdings, Inc. ("Classic") is the US-based owner of an extensive portfolio of intellectual properties focused on children's and family characters and brands.

The Acquisition will create a leading force in the independent global children's and family entertainment market - combining key children's and family brands such as ‘Postman Pat', ‘Basil Brush', ‘Rudolph the Red-Nosed Reindeer', ‘Lassie', ‘Casper the Friendly Ghost', ‘Dick Tracy, ‘George of the Jungle', ‘Jim Jam & Sunny', ‘Gerald McBoing Boing', ‘Lone Ranger', ‘Underdog', Pat the Bunny', ‘Felix the Cat', ‘Rupert Bear', ‘He-Man', ‘She-Ra', ‘Jess the Cat', ‘Ghostbusters' and the award winning ‘Veggie Tales'.

ER's acquisition of Classic offers opportunities for cross-selling Classic's existing properties and programming into Europe and other key international markets. Classic's strong relationships with broadcasters and key retailers in the US present significant opportunities to exploit ER's extensive library of programming and brands in the US market.

ER will exploit Classic's existing portfolio to create new revenue streams, including expanding Classic's licensing, music and new technology opportunities.

The combined library of The Enlarged Group will consist of approximately 8,700 episodes of high quality programming, characters and brands.

The Acquisition of Classic is subject to Shareholder approval at an Extraordinary General Meeting scheduled for 10.00 a.m. on 8 January 2007.

Mike Heap, CEO, Entertainment Rights plc, commented: "This Acquisition results in the creation of a major global force in children's and family content, characters and brands. It will unite the characters and brands of ER and Classic, creating one of the strongest portfolios of contemporary classic and new children's brands in the world."

"The Acquisition transforms ER's presence in the world's largest media market - the US - and offers an unprecedented opportunity to air ER's programming on US television and to sell its merchandise through American retail outlets. Similarly we will be exploiting Classic's high level content for non-US markets. There are strong cross-selling opportunities and synergies across the two portfolios."

"The Enlarged Group's portfolio will cover a broad demographic from pre-school to teens, providing a library of approximately 8,700 episodes of high quality programming that will delight children around the globe, and provide enhanced sales and distribution opportunities across the world creating a compelling offering for existing and new broadcasters, retailers and licensees."