The Postman Pat and Rupert Bear producer said it is in preliminary talks, which could lead to an offer being made.
Weekend reports linked the firm with Israeli media entrepreneur Haim Saban and Chorion-owner 3i.
Last Friday it announced a profit warning after missing its revenue forecasts for the second half of 2007 and its profits being hit by a shortfall in sales.
The firm said in a statement: "The board anticipates that group revenues for the year ended December 31st 2007 are expected to be slightly below the lower end of the current range of market expectations with a consequent impact to reported profitability.
“While it is disappointing to report a trading period that is below our expectations, the board remains confident that ER's business model is robust."