Saturday, September 27, 2014

Sale Pending?

Now with Add Ons!

The trades tell us ...

Word spread late today that Japanese conglomerate SoftBank was in talks to acquire DreamWorks Animation. When reached by Deadline, a DreamWorks Animation spokesperson said, “We do not comment on rumors and speculations; we do not know where this news is coming from.” A source with knowledge of the matter told Deadline, “talks are at a preliminary stage, but no paper has been signed.” ...

I've thought for a long time that Jeffrey was angling to sell DreamWorks Animation even as he denied he had any interest in selling. Back a few years ago, an animation exec (and entrepreneur) told me over breakfast that Mr. Katzenberg had been trying to sell DWA before the bottom dropped out of the economy in '08.

Six-plus years further on, DreamWorks Animation now owns some some valuable content, not only its library of films, but its internet properties, and its library of acquired cartoon characters. So at the right price, the company would be well worth purchasing. My crystal ball tells me if a sales happens, Jeffrey will stay involved with the company under a long-term employment contract.

I guess we'll find out how much change comes to DreamWorks Animation in relatively short order. If Softbank buys the the company, it will likely do it sooner instead of later. (Maybe even by Monday!)

Add On: The L.A. Times take; the New York Times take says this:

... 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. ...

This is pretty much what I've heard over the years. Mr. Katzenberg wants a Pixar-sized deal, but the Mouse's purchase of the Emeryville studio was a non-recurring phenomenon: Diz Co. believed it needed Steve Jobs' company a lot, and paid accordingly.

But there haven't been other conglomerates who felt the same way about DreamWorks Animation. So nobody is going to cough up $7,000,000,000. Maybe Jeffrey is coming to terms with this reality.

Add On: Bloomberg discusses Softbank's move to acquire DreamWorks Animation:

SoftBank controls the third-largest U.S. mobile operator, Sprint Corp. (S), and has been looking for more U.S. media and technology investments. The company ended talks to buy the fourth-largest mobile carrier, T-Mobile US Inc. (TMUS), in August because of regulatory opposition.

SoftBank can afford DreamWorks Animation and a successful deal would make it the second Japanese company to currently own a Hollywood film studio. The company’s stake of more than 30 percent of Alibaba Group Holding Ltd. (BABA), the Chinese e-commerce company that went public this month, has a market value of more than $70 billion. Sony Corp. (6758) owns a film and TV studio in Culver City, California.

Just weeks after abandoning the T-Mobile takeover, SoftBank sold almost $4 billion in bonds. Alibaba’s initial public offering on Sept. 19, which led SoftBank to forecast a gain of about 500 billion yen ($4.6 billion), is a step toward global expansion, Son said at the time on Bloomberg Television’s “Market Makers.”

Most Acquisitive

“The acquisition would benefit SoftBank in revenue, and also by offering content to its mobile carrier, it would benefit Sprint,” said Tomoaki Kawasaki, a Tokyo-based analyst with Iwai Cosmo Securities Co Ltd.

Son (CEO of Softbank) laid out a 300-year plan in 2010 that included investing in 5,000 companies by 2040. Even as he forecast that 99.98 percent of companies would cease to exist in their current form over the next 30 years, he vowed that SoftBank would survive. Last year, he attempted to buy Universal Music Group from France’s Vivendi. ...

“Most investors believe Katzenberg wants a deal with a bigger media company where he has a path to the CEO seat,” said Paul Sweeney, director of North American research at Bloomberg Intelligence. “This does not appear to be such a deal.” ...

Add On Too: The Wall Street Journal says (behind a fire wall):

SoftBank Corp.'s discussions to acquire DreamWorks Animation SKG Inc. have cooled, according to people familiar with the matter, less than two days after word first emerged of the talks.

It wasn't immediately clear what had happened between Saturday, when the talks were under way, and Monday. It remained possible that negotiations could restart, two of the people said. The two sides could ultimately strike a deal other than an outright takeover ...

Add On III: Like an energetic shark, Softbank has, if reports are true, turned its attention away from DWA.

The same day that talks SoftBank and DreamWorks Animation cooled off, the Japanese telco/Internet company has turned its attention to Legendary Pictures. Sources tell Deadline that Softbank is looking to take an equity stake in Thomas Tull’s studio, which aligned with NBCUniversal last year. Legendary reps could not be reached for comment. ...


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