» » Japanese Company Is Said to Bid for DreamWorks Animation

Japanese Company Is Said to Bid for DreamWorks Animation

Posted by Unknown on Saturday, September 27, 2014

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Media |Japanese Company Is Said to Bid for DreamWorks Animation



http://nyti.ms/YvNyLu








LOS ANGELES — Roughly a year and a half after ending an unsuccessful search for a buyer in Hollywood, DreamWorks Animation has ended up with a surprise suitor: SoftBank Corporation, the Japanese telecommunications and Internet giant.


The acquisition offer, confirmed by a person with knowledge of the matter, speaking on the condition of anonymity to preserve relationships, was first reported by The Hollywood Reporter, a trade magazine. It said that SoftBank had offered $32 a share for the boutique studio DreamWorks Animation, a 45 percent premium over the share price. That would value it at $3.4 billion.


A DreamWorks Animation spokeswoman, Allison Rawlings, on Saturday night said, “We don’t comment on rumor and speculation.”


DreamWorks Animation is Hollywood’s smallest movie studio, delivering only two or three films a year. But the company casts a large shadow because it is run by one of the entertainment industry’s best-known figures, Jeffrey Katzenberg. Its hits have included “Shrek,” “Kung-Fu Panda” and “Madagascar.”


But the DVD surge that fueled the studio’s early days as a public company a decade ago has since sharply receded. Mr. Katzenberg for a time looked for a buyer, but flirtations with NBCUniversal and others went nowhere. Since deciding to go it alone, DreamWorks Animation has aggressively pushed into television production.


The company has also been working to build a substantial consumer products business and has multiple business initiatives underway in China. Mr. Katzenberg was also early to spot the promise of YouTube, buying a fast-growing network of video creators aimed at teenage girls called AwesomenessTV.


One reason that acquisition talks have never gone anywhere is that Mr. Katzenberg — who controls an outsize portion of the voting power — has demanded a hefty price. Mr. Katzenberg has publicly said in the past that he believes DreamWorks Animation is worth as much as its rival, Pixar Animation Studios. The Walt Disney Company paid $7.4 billion for Pixar in 2006.


Still, DreamWorks Animation, which operates separately from Steven Spielberg’s privately held DreamWorks Studios, has lately had trouble finding new franchises. “The Croods” was a big performer last year, and a sequel is on the way, but “Turbo,” “Rise of the Guardians” and “Mr. Peabody & Sherman” were all duds. The company’s last release, “How to Train Your Dragon 2,” took in a hefty $611 million worldwide, but domestic ticket sales fell 19 percent below those of the first installment.


The company has suffered two consecutive quarters of losses. For the quarter that ended June 30, DreamWorks Animation lost $15.4 million compared with a profit of $22.3 million in the same period a year earlier.


A deal for DreamWorks Animation would be yet another bold move by SoftBank, coming nearly two months after the Japanese telecommunications giant abandoned efforts to buy T-Mobile USA. Under Masayoshi Son, SoftBank’s outspoken chief executive, the company has pursued ambitious expansion efforts, including unsuccessful attempts to buy T-Mobile and the Universal Music Group.


The Japanese company has signaled that it may pursue yet more investments into content and technology by having hired Nikesh Arora, formerly Google’s chief business officer, as the head of its Internet and media arm.



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