Marwyn Neptune Fund is looking to raise its stake in Entertainment One, and has proposed a partial cash offer that would raise its share in the Toronto producer and distributor to 48.5%.

The London-based equity investor will offer 12.5 pence ($0.23) per share to purchase up to 27 million shares of E1, or 20.8% of the company’s current issued share capital.

Marwyn, which in March 2007 took E1 private for $168 million and refloated it on London’s AIM exchange, already holds 36.1 million shares, or a 27.7% stake, in the Canadian media group.

The proposed transaction is conditional. Shareholders must offer their approval of the partial cash offer and at least one million shares by a March 26 special meeting.

The Canadian company recently delayed plans to seek a listing on the Toronto Stock Exchange after it pulled plans for a reverse takeover deal with DHX Media.

The March 26 meeting will include a vote on whether to grant Marwyn the right to raise its stake to 49.9% without triggering a formal takeover bid.

James Corsellis, non-executive director of Entertainment One and managing partner of Marwyn Investment Management LLP, in a statement said the partial cash offer aimed to increase his fund’s long-term interest in E1 by taking advantage of an under-valued share price.

‘In seeking to increase our stake significantly we are underlining our confidence in the future of Entertainment One,’ he said.

Shares in E1 on Friday touched a 52-week low of 12.5 pence on the AIM exchange, down 2.5 pence, or 16.6% in value, on Thursday’s close.