SoftBank in talks to buy DreamWorks Animation Studio

SoftBank in talks to buy DreamWorks Animation StudioIf you are a big fan of animation movies, you must have definitely heard of the company, Dreamworks Animation. It is the same studio behind a number of commercially successful movies like Shrek, Madagascar, How to Train Your Dragon etc.

While these movies have generated a lot of revenue for the company, many of recent releases have not been that popular which have adversely affected the financials of the company.

But things could get much better for the studio as a recent report from the Hollywood reporter says that SoftBank, the Japanese Internet giant is interested in buying the company. The same source further adds that the deal could potentially value DreamWorks at $3.4 billion, which is much higher than the current valuation of around $2 billion.

DreamWorks Studio was founded by the film executive, Jeffrey Katzenberg, who is also the CEO of the company. In the past few years, the studio has struggled mainly due to direct competition from much larger
companies and the poor performance of some of its recent releases. Even smaller companies like Blue Sky Studios, which is known for its popular Ice Age series, are proving a threat to the company due to its relatively small production cost.

And as things were not working out well for the studio, Katzenberg was reportedly looking for a buyer.

So, SoftBank acquiring Dreamworks Animation doesn’t sound so bad. In fact, such a large company can protect the studio from investor pressure and allow it to focus on its productions. This will further help the studio compete on a much larger scale in the industry.

The source reveals that SoftBank has offered $32 per share for DreamWorks, which is 43% more than its current share price of $22. It is said that DreamWorks held an emergency meeting last Thursday to discuss the possibility of a sale. However, as of now, both SoftBank and DreamWorks have not yet announced anything publicly.

Katzenberg being an important part of the company since its inception, SoftBank has reportedly asked him to sign a five year contract to remain with the company after its acquisition. However, we don’t know as of yet whether he agreed to the terms and conditions of the deal.

SoftBank is currently in a great position to buy a company like DreamWorks, thanks to its recent gains worth billions of dollars in the Chinese Internet giant, Alibaba’s IPO. The company has a 32% stake in Alibaba Group Holdings Ltd, which it purchased for $20 million 14 years back. Today, after the IPO, the same stake is worth $71 billion.

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About the author

Joel is an experienced blogger who covers all kinds of news relating to tech. He is a huge fan of Android and can be seen playing around with his phone in his spare time.