Softbank is reportedly offering a 43 percent premium to buy the creator of ''Shrek,'' DreamWorks Animation, valuing the studio at $3.4 billion. Fred Katayama reports.
Shrek may have found another Princess Fiona in Softbank. A source says the Japanese media company is in talks to buy the ogre's parent, DreamWorks Animation. And it's offering a huge dowry. The Hollywood Reporter says it's valuing the Hollywood studio at $3.4 billion, a 43 percent premium over the stock's closing price on Friday. Cowen analyst Doug Creutz said, "We think it is hard to justify the premium Softbank is reportedly offering. There appears to be little strategically interesting about the deal ... Attempts have been made many times to marry content and distribution and they generally have not borne fruit." Run by Hollywood legend Jeffrey Katzenberg, DreamWorks has produced monster-size hits like "Shrek" and "Madagascar." But it has also recently produced a string of flops and two straight quarterly losses. Softbank could give it access to capital. Softbank, the majority owner of mobile phone company, Sprint, has been investing in content. Masayoshi Son's company is also the biggest shareholder in e-commerce giant Alibaba, and it and DreamWorks have been expanding their investments in China. This summer, Softbank tied up with Lions Gate Entertainment to feed more titles to its set-top boxes in China. A deal between Softbank and DreamWorks could push small independent studios like Lions Gate to seek partners. DreamWorks Animation's stock, which has plunged 37 percent this year, blasted higher in early trading. Softbank's shares fell slightly in Tokyo. Lions Gate shares gained ground.