Wednesday, November 12, 2014

DWA's Merger Mania

The trade papers tell us.

DreamWorks Animation is deeply engaged in two potentially game changing negotiations that could transform the company — including one with Hasbro to forge a family entertainment powerhouse to be called DreamWorks-Hasbro. The other talks are with Hearst to turn DWA’s AwesomenessTV into a joint venture.

We’re told that a DWA and Hasbro deal is at least 60 days off, if it happens. But the two companies are said to have agreed that Jeffrey Katzenberg would chair the combined operation. ...

Meanwhile, DWA is moving quickly on another potential deal with Hearst Publishing to form a joint venture involving AwesomenessTV. Hearst would pay $81.25 million for a 25% stake in the Internet video power with $56.25 million going directly to DreamWorks and $25 million used as an investment in ATV. The terms would value ATV at $300 million, double what DreamWorks paid for it in May 2013. ...

Last week I was at DreamWorks Animation, doing a 401(k) meeting and walking around the Lakeside Building, which sits between the Los Angeles River and Lake Katzenberg (actually a big pond with fish in it). One of the artists in the building said:

You know, I see people from other companies coming through here. And I've got this feeling that DreamWorks is going to be sold. ...

I answered that I calculated that DreamWorks Animation would be sold in the next two or three years.


But I didn't think much about DWA doing lots of mergers, selling off chunks of its businesses to other entertainment companies, bit by bit. So maybe Jeffrey's corporation will be selling itself in slow motion.

Seems that's what might be happening.

Add On: The New York Times has its take:

In a deal that would be an unusual union of toy maker and an animation studio, Hasbro is in talks to buy DreamWorks Animation, a person briefed on the matter said on Wednesday.

Under the current terms of the proposed deal, Hasbro would pay a mix of cash and stock, though an exact price has not been determined yet, this person said. Jeffrey Katzenberg, the chief executive of DreamWorks Animation, is seeking more than $30 a share, a significant premium over his company's current stock price. ...

We'll see if this deal goes through ... or falls apart like the last one.


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