CNN.com - Bob stalks Thomas the Tank Engine

Bob the Builder: Can he fix it?

LONDON, England (CNN) -- HIT Entertainment, home of children's television character Bob the Builder, is in talks to buy rival Gullane Entertainment, the owner of Thomas the Tank Engine.

British children's television producer HIT (HTE) said on Monday its offer would value each Gullane share at 500 pence, valuing the company at 150 million ($218 million)

Gullane (GUL) rejected an all-share offer of 750 pence per share two years ago. That offer valued the company at about 225 million. Its shares have halved since then, and closed at 375 pence on Friday, valuing the company -- which also owns Sooty and Captain Pugwash -- at about 116 million.

HIT's latest offer represents a 32 percent premium to Gullane's closing price on Friday. HIT closed at 342.5 pence, giving it a market capitalisation of about 470 million.

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A deal would create one of the biggest producers of children's television outside the United States with a value of about 600 million.

Last year, HIT bought Texas-based Lyrick, which is behind purple dinosaur character Barney for $275 million. And in December, Gullane acquired 50 percent of Fireman Sam.

HIT slipped 10 pence, or 2.9 percent, to 333 pence in midday London trading, while Gullane soared 100 pence, or 26.3 percent, to 468 pence.