DreamWorks SKG principals Steven Spielberg, Jeffrey Katzenberg and David Geffen are offering private investors a 33% stake in their company in an effort to raise $1 billion in equity financing, sources say.
DreamWorks is understood to be in serious talks with private investors, believed to include the California Public Employees Retirement System (Calpers) and Korean conglomerate Samsung about the possibility of an equity investment totaling $900 million, sources say. DreamWorks plans to raise another $1 billion in debt.
The three principals would contribute $100 million among them, retaining 67% of the equity.
Even though the outside investors are putting up the bulk of the money, their equity can be easily limited to 33% by the use of non-voting stock or other forms of quasi-equity, bankers said.
Insiders said the company has been deluged with offers from interested investors, but the trio has made it clear they want to keep the number of investors to a minimum.
DreamWorks has received so many offers that it’s trying to raise the money without using an investment bank, sources say.
Katzenberg could not be reached for comment.
Calpers recently invested $250 million in Comcast Corp.’s acquisition of cable concern Maclean Hunter. After investing in that deal, Calpers reps told Comcast that they wanted to do more such deals, indicating that the pension fund’s managers are interested in investing further in the entertainment industry.