REPORT: Japan's SoftBank Is In Talks To Acquire DreamWorks Animation

Jeffrey Marilyn Katzenberg donorKevin Winter / Getty ImagesDreamWorks CEO Jeffrey Katzenberg.

Japan’s SoftBank is in talks to acquire DreamWorks Animation, according to a report from The Wall Street Journal.

A potential price for the deal was not known, the report said.

As of Friday’s market close DreamWorks had a market cap of just less than $US2 billion.

DreamWorks Animation has produced films including “Shrek”, “Madagascar”, and “How To Train Your Dragon.”

The report said that a deal for DreamWorks would provide SoftBank — which owns about 80% of Sprint and earlier this year sought to combine Sprint with T-Mobile before abandoning the deal earlier this summer — “another route to try to fulfil [its] ambition of challenging America’s top two wireless carriers, AT&T and Verizon.”

DreamWorks Animation shares are down more than 37% year-to-date, and the Journal said news of a potential deal comes a “crucial juncture” for the company.

From WSJ:

The development comes at a crucial juncture for DreamWorks Animation and its chief executive, Jeffrey Katzenberg, one of Hollywood’s highest-profile executives, who has sought to define a long-term strategy that would help the company counteract a recent spell of mixed box-office results.

Since spinning off from DreamWorks SKG and going public in 2004, DreamWorks Animation stock has largely risen and fallen on the box-office performance of its feature films, something Mr. Katzenberg has been trying hard in recent years to change.

A string of box-office disappointments has severely depressed the company’s share price, forcing Mr. Katzenberg to assure investors that moves in industries like television, digital video and consumer products will help make its stock price less reliant on the two to three feature films the company releases annually.

The Journal adds that pursuing this deal makes SoftBank CEO Masayoshi Son the first Japanese investor to chase a deal in Hollywood since the Japanese economic bubble of the late 1980s.

Earlier this month, SoftBank said it would book a gain of a bit less than $US5 billion on the sale of a portion of its stake in Alibaba, the Chinese e-commerce giant that went public in the largest IPO in US stock market history.

SoftBank has a 32% stake in Alibaba, which it first acquired 14 years ago for $US20 million; that stake is now worth $US71 billion, the Journal said.

(via WSJ)

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