Hasbro in talks to buy over DreamWorks studio
SHREK and the cast of Kung Fu Panda could soon share a home with the Transformers and My Little Pony, if their corporate parents can seal a deal.
Toymaker Hasbro is in advanced talks to buy DreamWorks Animation, potentially gaining a new big-screen outlet for its wares, sources briefed on the matter said on Wednesday.
Should a deal be reached - and the sources warned that talks might still fall apart - it would mark a new chapter for DreamWorks Animation.
It would also come more than a month after the studio held talks with another prospective buyer, the Japanese telecommunications company SoftBank. The talks with SoftBank fell apart, with one source citing price as a dissuading factor.
Under the current terms of the proposed deal, Hasbro would pay a mix of cash and stock, though an exact price has not yet been determined, sources said.
Jeffrey Katzenberg, the chief executive of DreamWorks Animation, is seeking more than US$30 (S$39) a share, a significant premium over his company's current stock price.
Shares in DreamWorks Animation closed on Wednesday at US$22.37, giving the studio a market value of about US$1.9 billion. Hasbro's stock closed on Wednesday at US$57.47 a share, giving it a market value of about US$7.2 billion.
Mr Katzenberg, the Hollywood mogul who runs DreamWorks Animation, is expected to stay with the company, the source added.
In courting the Hollywood studio, Hasbro believes that it can find a new market for its stable of toys, which includes Transformers, G.I. Joe and My Little Pony. The company has reported robust sales in recent years. Last month, it reported sales of US$1.47 billion in its third quarter, up 7 per cent from the same period a year earlier.
In buying DreamWorks Animation, Hasbro would be teaming up with Hollywood's smallest film studio. DreamWorks Animation produces only a handful of movies a year but has been responsible for blockbusters like the Shrek and Kung Fu Panda franchises.
The studio has fallen on harder times in the past couple of years, with films like Turbo and Rise Of The Guardians falling well short of expectations.
DreamWorks Animation's recent run of misfortune helped contribute to two consecutive quarterly losses, including a US$15.4 million loss in the quarter ended June 30.
News of the talks between Hasbro and DreamWorks Animation was reported earlier by Deadline.com, a trade publication.