×

DreamWorks Animation Sale Talks with Hasbro End

Hasbro does not plan to acquire DreamWorks Animation, in a deal that would have been worth at least $2.3 billion, Variety has confirmed.

The toymaker ended conversations with the toon studio on Friday, causing DWA’s stock to plummet more than $2.50 a share after the close of the trading day on Wall Street.

While sources close to the merger discussions between the two companies say talks were in their early stages, the very idea had Hollywood considering the prospects of an entertainment juggernaut that would have combined popular franchises, TV shows, digital platforms, and a growing consumer products, live events and location-based entertainment business.

Several factors led to the ending of talks between Hasbro and DreamWorks. Hasbro chief Brian Goldner is said to have grown skittish over the impact the potential merger had on Hasbro’s stock, which fell 4% on Thursday to $54.98 and another 1.75% on Friday to $54.02.

Investors regained confidence in Hasbro after merger talks were reported to have ended.

Analysts criticized the deal, especially the price DWA was asking, which some say ranged between $30 and $35 a share. That was far too high for some observers.

DWA chief Jeffrey Katzenberg wanted at least $30 a share. Some put the asking price as high as $35.

DreamWorks Animation’s potential as an acquisition target has been a leading investment thesis for owners of the stock since DWA went public in 2004, following the box office success of ‘Shrek 2,’” said Richard Greenfield and Brandon Ross, analysts at BTIG Research, on Friday, following news that the talks were under way on Thursday. “Unfortunately for DWA, the company’s inconsistent creative output, and thus financial performance, makes it hard to understand why anyone would want to acquire the company at its current market valuation, let alone the $3 billion plus that management supposedly covets.”

FBR Capital Markets also was doubtful, saying, “Katzenberg, we believe, has a constructive view of DWA’s value, which can make it hard for the seller and buyer to agree on pricing.”

Neither side has officially commented on why the talks fell apart, nor the potential of a deal. The Hollywood Reporter first reported the news that the two sides had parted ways.

Hasbro follows recent conversations DWA has had to sell the toon studio. In September, it discussed such a sale with Japanese tech giant SoftBank, that also ended just days later.

Popular on Variety

More Biz

  • WWE NXT

    WWE's 'NXT' Moves to USA Network as Wrestling Competition Heats Up

    WWE has struck a deal to move its “NXT” franchise focusing on rising stars to USA Network starting next month. “NXT” will shift to USA from the WWE Network subscription streaming service as of Sept. 18. The deal comes as USA is about to lose WWE’s “SmackDown” showcase to Fox starting in October. USA is [...]

  • Shazam

    Apple Music Launches 'Shazam Discovery' Chart, Focused on New Artists

    Apple Music today launched the “Shazam Discovery Top 50,” a weekly, global ranking of 50 artists that it describes as “on the move and trending” — in other words, new and emerging artists. While the company wouldn’t say much specifically about how the chart is tabulated, it uses “Shazam’s proprietary algorithms [to offer] a unique predictive view [...]

  • The Chainsmokers Production Company

    Chainsmokers’ Catalog Acquired by Fast-Growing Hipgnosis Songs

    The Chainsmokers’ writer and publishing rights have been acquired by the fast-growing Hipgnosis Songs and its investment adviser, The Family (Music) Limited, for an undisclosed amount, the company announced today. The company has acquired 100% of the Chainsmokers’ interest in 32 of the duo’s songs, including ASCAP (American Society of Composers, Authors and Publishers) income in [...]

  • Hollywood Recession Business Placeholder

    How an Economic Downturn Could Ravage Hollywood

    Trade-war fears, stock market volatility and, most recently, bond market signals that point to a pending recession are rattling investors, igniting concerns that another devastating downturn may be just around the corner. As those worries reverberate all the way from Wall Street to Hollywood, the entertainment industry is in for an unsettling reminder of the [...]

  • RuPaul Charles - Outstanding Reality -

    RuPaul Charles to Receive Variety's Vanguard Award at Mipcom

    “RuPaul’s Drag Race” leader RuPaul Charles has been tapped to receive the Variety Vanguard Award at the Mipcom international TV sales conference, set for Oct. 14-17 in Cannes. The award recognizes television industry leaders who have made a significant contribution to the global business of entertainment. Charles has hosted and executive produced the VH1 franchise “RuPaul’s Drag [...]

  • iQIYI headquarters building in Beijing

    Chinese Streamer iQIYI Squeezed by Changing Content Context

    Chinese video streaming giant iQIYI saw its losses deepen, in the April to June second quarter of its financial year. The company grew subscriptions, but was hit by rising content costs and lower advertising revenue Its parent company, Chinese search leader, Baidu saw its year on year profits drop, though it recovered from loss in [...]

More From Our Brands

Access exclusive content