80.3 F
San Fernando
Monday, May 23, 2022
Array

DreamWorks Tanks as Hasbro Talks End

Shares in DreamWorks Animation SKG Inc. fell more than 14 percent on Monday, the first trading day since reported merger talks with Hasbro Inc. ended. The Glendale animation studio had seen its shares skyrocket on reports that it was in talks to combine with Hasbro, the nation’s second largest toymaker, in a deal valued at more than $2 billion. With the talks over, DreamWorks shares dropped $3.71 to $22.31 on the Nasdaq. Shares closed Friday at $26.02. Hasbro, on the other hand, saw its share price increase by $2.35, or more than 4 percent, to $56.37. Its shares had lost value after the merger talks became public, in indication its investors were not pleased with the deal. This is the second time in seven weeks there were reports of an interested bidder in DreamWorks, which has seen its share price fall following a series of box office bombs. In late September, Japanese communications and Internet company SoftBank Corp. was said to be interested in acquiring the studio in a deal valued at $3.4 billion, or $32 a share. Those discussions also did not result in a deal. Hasbro in Pawtucket, R.I. has toy lines that have already been the basis for successful movies, most notably “The Transformers” franchise distributed by Paramount. The deal was seen as a way for the toymaker to find a permanent Hollywood creative partner. However, some analysts felt that the $35 share price sought by DreamWorks Chief Executive Jeffrey Katzenberg was too much given a recent string of box office bombs that have forced a series of write-downs. “Anytime you have a film studio and the volatility that comes with that, some people (on Wall Street) could not get over that,” said Tuna Amobi, equity analyst at S&P Capital IQ, in New York, who thinks that DreamWorks remains a ripe target for the right buyer, either foreign or domestic. “Foreign sources have never been more interested in Hollywood assets and with the capital markets being favorable I would not rule out strategic buyers among the large studios,” he added.

Mark Madler
Mark Madler
Mark R. Madler covers aviation & aerospace, manufacturing, technology, automotive & transportation, media & entertainment and the Antelope Valley. He joined the company in February 2006. Madler previously worked as a reporter for the Burbank Leader. Before that, he was a reporter for the City News Bureau of Chicago and several daily newspapers in the suburban Chicago area. He has a bachelor’s of science degree in journalism from the University of Illinois, Urbana-Champaign.

Featured Articles

Related Articles