Japan’s telecoms giant Softbank is reportedly negotiating a US$3.4bn acquisition of US animation studio DreamWorks Animation.
DreamWorks management held an emergency board meeting on Thursday to discuss Softbank’s US$32 per share offer, according to…
Japan’s telecoms giant Softbank is reportedly negotiating a US$3.4bn acquisition of US animation studio DreamWorks Animation.
DreamWorks management held an emergency board meeting on Thursday to discuss Softbank’s US$32 per share offer, according to the Hollywood Reporter citing a source with knowledge of the situation.
The offer would represent a 43% premium on the US$22.36 closing price of DreamWorks’ shares on Friday.
As part of the deal, the studio’s founder and CEO Jeffrey Katzenberg would sign a five-year contract to remain with the company.
A later report by the Wall Street Journal quoted one source as saying that the talks were in the early stages and might result in a distribution partnership or the purchase of an interest in DreamWorks, rather than a full acquisition.
Softbank and DreamWorks did not respond to a request for comment.
The potential deal is reportedly being brokered by former Google executive Nikesh Arora, who was hired by Softbank in July to head its Internet and Media unit and help it identify ways to expand its digital content offering.
The listed California-based studio, which in the last few years produced a number of blockbusters such as Shrek, Madagascar and King Fun Panda, is rumoured to have been looking for investors as more recent titles have been less profitable.
The company posted a net loss of US$15.4m in Q2 2014 on revenues of US$122.3m.
Meanwhile, Tokyo-based Softbank has been associated with a number of potential targets in recent months, including Carlos Slim’s America Movil, Ricardo Salinas’ Iusacell and British operator Vodafone, ever since it failed to buy T-Mobile US.
In August, Softbank CEO Masayoshi Son abandoned plans to acquire the US fourth-largest carrier and merge it with its own local operator Sprint over regulatory concerns.
Rick Mattila, an analyst at Mitsubishi UFJ Securities, said a potential tie-up with DreamWorks would be a reasonable addition of content assets for Softbank.
He added that the deal would be relatively small for the Japanese operator, which could fund the purchase from existing cash without any difficulty.
In addition, Softbank said last week it booked a US$4.6bn gain following the IPO of Chinese e-commerce company Alibaba, in which it has kept a 32% stake. In 2000, the telco invested US$20m in Alibaba. Its holding is now valued at approximately US$72.35bn.
“The deal will have very little impact on bond market perception of Softbank – particularly following the valuation of Softbank’s stake in Alibaba,” Mattila noted.
