New York: SoftBank is in talks to buy DreamWorks Animation, the company behind the Shrek and Kung Fu Panda films, in a deal that would give the Japanese group control of Hollywood’s largest independent animation studio.
A person familiar with the situation cautioned that while talks between the two companies had taken place, it was unclear if they would yield a sale of DWA.
DWA was spun out of DreamWorks, the studio started by David Geffen, Steven Spielberg and Jeffrey Katzenberg, in 2004. Katzenberg, DWA’s chief executive — and one of Barack Obama’s biggest fundraisers — is known to have explored a potential sale of the company on more than one occasion over the past few years.
The company had a market capitalisation of $1.9 billion at the close of trading on Friday.
DWA has scored some of Hollywood’s biggest animated hits and has blazed a trail in China, striking a deal to build a $2.4 billion entertainment complex in Shanghai and forming a joint venture with three state-owned media companies to produce film and television series in the country.
It has also suffered its share of missteps, taking write downs on three of its recent films: Rise of the Guardians, Turbo and Mr Peabody and Sherman.
News of the discussions between SoftBank and DWA was first reported by The Hollywood Reporter.
SoftBank, founded by Masayoshi Son, is flush with cash after investing $20 million in Alibaba 14 years ago. Its stake in the Chinese e-commerce group was worth almost $75 billion after Alibaba’s first week of trading.
SoftBank has been on the prowl for media deals. The company has been linked with a bid for Yahoo and has explored music streaming deals, at one point offering Beats Music $1 billion for exclusive rights to offer its service on Sprint, the US mobile group it controls. The deal did not come to fruition and Beats was eventually sold to Apple for $3 billion.
SoftBank acquired Vodafone’s Japanese arm in 2006 and promptly started a price war in the Japanese telecoms sector. It hoped to disrupt the US sector in similar fashion after paying $22 billion for its majority stake in Sprint, with the aim of merging the company with T-Mobile, the fourth largest US carrier, but abandoned the plan in the face of regulatory opposition.
Its talks with DWA come as investors take a fresh look at leading content production companies. 21st Century Fox pursued Time Warner recently, attracted by brands such as HBO and Warner Brothers, but swiftly abandoned its $70 billion deal after its own shares fell.
DreamWorks declined to comment on the talks. SoftBank could not reached for comment.
— Financial Times
