Japan's SoftBank Eyes DreamWorks Animation in $3.4bn Deal

Japanese internet giant SoftBank is reportedly looking to acquire DreamWorks Animation in a deal that could value Hollywood's smallest studio at $3.4bn, reports said.

SoftBank has offered $32 per DreamWorks' share, a substantial premium to the stock's 26 September closing price of $22.36, which values the firm at $1.89bn (£1.16bn, €1.49bn). Talks were first reported by trade publication The Hollywood Reporter.

A purchase will help Softbank, which has a 32% in Chinese e-commerce giant Alibaba post the latter's New York float, acquire a high profile content creator. DreamWorks is behind the movie hits How to Train Your Dragon, Kung Fu Panda, Madagascar and Shrek.

A sale will help the loss-making studio tap Softbank's deep pockets, and expand its footprint in Asia.

Cash-Rich Softbank

SoftBank has booked a gain of nearly $4.6bn from Alibaba's 19 September NYSE flotation.

The gain was recorded to reflect Alibaba's increased asset value with the issuance of new shares and the conversion of preference shares to common stock in conjunction with the listing.

The offer for DreamWorks comes nearly two months after the Japanese firm, which holds a significant stake in US mobile carrier Sprint, abandoned a bid for T-Mobile US amid antitrust concerns.

Sprint is the third-largest US cellular operator and T-Mobile is the fourth largest.

DreamWorks's stock has lost some 37% so far this year, pulled down by two straight quarterly losses, several weak-performing releases such as Mr Peabody & Sherman and investor concern surrounding the production costs of its movies.

SoftBank is only the second Japanese firm, after Sony, to eye a Hollywood studio. The electronics major acquired Columbia Pictures in 1989.