This article was updated at 7:35 p.m.
Japanese media conglom Kadokawa Holdings will invest $100 million in DreamWorks, giving the company a 2.83% stake in the privately owned studio formed in 1994 by Jeffrey Katzenberg, Steven Spielberg and David Geffen.
The equity and distribution deal is similar in structure — if not scale — to DreamWorks’ partnership with Universal, as well as its contract with Korean distribution company Cheil.
Move, which values the studio at slightly more than $3.5 billion, comes as DreamWorks mulls an initial public offering of its animation division later this year, following the releases of CGI sequel “Shrek 2” and toon laffer “Shark Tale” (Daily Variety, Feb. 10). The pics bow May 21 and Oct. 1, respectively.
Both movies will be heavily promoted, stoking the public’s perception of DreamWorks as a strong animation contender.
Furthermore, there is believed to be an upcoming window during which billionaire Paul Allen can recover some or all of his $700 million investment in DreamWorks — a detail that makes a 2004 IPO seem likely. Sources say Allen has not signaled an intention to exercise his option to recover the investment. It was unclear when the investment money must be repaid under the option.
There is also speculation that an IPO could be delayed until 2005, to avoid the economic uncertainty that usually accompanies a presidential election. DreamWorks execs are also concerned about possible terrorism threats that may coincide with the elections and their potential effect on the public markets.
A DreamWorks spokeswoman declined to comment on the possibility of an IPO or its timing.
Kadokawa’s investment gives the Tokyo-based company exclusive rights to distribute DreamWorks films, videos, DVDs and other products in Japan.
Kadokawa expects sales of about $32 million from selling DreamWorks content in the year started April 1 and $138 million the following year.
Company has been aggressively acquiring film properties of late. Last month, Kadokawa bagged a majority stake in Japanese film distributor and exhib Nippon Herald Film, strengthening the company’s position in Japan’s film and media business.
Kadokawa also controls distrib Asmik-Ace Entertainment and, in 2002, acquired film producer Daiei Co., including its library comprising many of Japan’s classics.
Kadokawa Shoten, a subsidiary of Kadokawa Holdings, published horror novel “The Ring,” upon which the Japanese film, and subsequently DreamWorks’ American version, were based.
DreamWorks’ “The Ring 2” begins shooting next month.