Hasbro in talks to buy Dreamworks Animation

[Whiskey Tango]

DreamWorks Luna by Chiramii-chan
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Shrek could soon share a home with the Transformers and little ponies like Flutteryshy and Twilight Sparkle if their corporate parents are able to seal a deal.

The toymaker Hasbro is in advanced talks to buy DreamWorks Animation, potentially gaining a new big-screen outlet for its wares, people briefed on the matter said on Wednesday.

Should a deal be reached — and these people cautioned that talks were continuing and might still fall apart — it would mark a new chapter for DreamWorks Animation. It would also come more than a month after the studio held talks with another prospective buyer, the Japanese telecommunications company SoftBank.

Under the current terms of the proposed deal, Hasbro would pay a mix of cash and stock, though an exact price has not yet been determined, one of the people said. Jeffrey Katzenberg, the chief executive of DreamWorks Animation, is seeking more than $30 a share, a significant premium over his company’s current stock price.

Shares in DreamWorks Animation closed on Wednesday at $22.37, giving the studio a market value of about $1.9 billion. Hasbro’s stock closed on Wednesday at $57.47 a share, giving it a market value of about $7.2 billion.

Mr. Katzenberg, the Hollywood mogul who runs DreamWorks Animation, is expected to stay with the company, the person added.

In courting the Hollywood studio, Hasbro believes that it can find a new market for its stable of toys, which includes Transformers, G.I. Joe and My Little Pony. The company, the second-biggest toymaker in the United States behind its rival Mattel, has reported robust sales in recent years. Last month, it reported sales of $1.47 billion in its third quarter, up 7 percent from the same period of a year earlier.

Hasbro’s chief executive, Brian Goldner, has long sought to take advantage of the company’s properties to transform it into a global entertainment titan, notably by forming its own studio in 2009 to develop and produce television shows and movies.

One model might be the Lego Group, a privately held Danish company. Lego started with its trademark plastic toy bricks and transformed itself into a broader entertainment company by creating Lego video games and building seven Legoland theme parks. Its most recent effort was a collaboration with Warner Bros., “The Lego Movie,” which took in $468.1 million worldwide. Three sequels are on the way.

Some of Hasbro’s own efforts have met with success. The four live-action “Transformers” movies, made together with Paramount Pictures, have produced nearly $3.8 billion in ticket sales. And Universal recently hit pay dirt with “Ouija,” a horror film based on the classic Hasbro board game. The film cost $5 million to make and has so far taken in $57.9 million.

But Hasbro’s four-year joint venture with Discovery Communications to establish a children’s cable channel, the Hub Network, ended in October when Discovery bought a controlling and rebranded the channel Discovery Family.

Hasbro has also suffered a few movie flops, notably “Battleship,” in 2012.

In buying DreamWorks Animation, Hasbro, which is based in Pawtucket, R.I., would be teaming up with Hollywood’s smallest film studio. DreamWorks Animation produces only a handful of movies a year but has been responsible for blockbusters like the “Shrek” and “Kung Fu Panda” franchises. The company was spun off in 2004 from DreamWorks Studios, which is privately owned.

The studio has fallen on harder times in the past couple of years, with films like “Turbo” and “Rise of the Guardians” falling well short of expectations. Even its most recent hit, “How to Train Your Dragon 2,” suffered from lower domestic ticket sales than its predecessor. Source material that is already familiar to children — like Hasbro toys — would give the studio a leg up when it comes to generating interest in a related movie.

DreamWorks Animation’s recent run of misfortune helped contribute to two consecutive quarterly losses, including a $15.4 million loss in the quarter ended June 30. But in the most recent quarter, the company reported net income of $11.9 million, a 17 percent increase compared with results in the same period of a year earlier. From its high in early 2010, the studio’s stock price has fallen 49 percent. Yet analysts have said that DreamWorks Animation still has a trove of lucrative content in its library. And the company has been making forays into television production and an array of other business initiatives, from an entertainment center in Shanghai to indoor mini-theme parks in Russia.

The studio also owns AwesomenessTV, a YouTube channel aimed at teenage girls.

News of the talks between Hasbro and DreamWorks Animation was reported earlier by Deadline.com, a trade publication.

http://dealbook.nytimes.com/2014/11/12/hasbro-said-to-be-in-talks-to-buy-dreamworks-animation/

http://deadline.com/2014/11/dreamworks-animation-hasbro-merger-negotiations-in-works-1201282751/

 

[Pink Ranger]

I'm not sure how I feel about this. When Disney acquired Marvel and Star Wars, it was a case of a huge company already well known for producing quality entertainment acquiring some beloved intellectual properties.

Hasbro is a toy company, known for being involved with movie franchises that are mediocre on their best day. That they will be the controlling stakeholder of Dreamwork animation, and not the other way around, may be a tail wagging the dog situation.

 

[Wheels]

Hasbro's cartoons generally aren't that good either. There best quality shows are He-Man 2002 and My Little Pony: Friendship is Magic.

 

[Pink Ranger]

Hasbro buying DreamWorks is like a shady Chinese restaurant buying an animal shelter.

 

[Wheels]

Hasbro buying DreamWorks is like a shady Chinese restaurant buying an animal shelter.

LOL so true.

 

[Sawyer]

I just want my goddamn Captain Underpants movie, is that so much to ask?!

 

[TheVileOne]

That puts DWA on too high a pedestal.

 

[Hush]

Dreamworks NEEDS this. They need it more than Hasbro does plus even though Hasbro has a rough history a toy line would have helped a splendid movie like Guardians great deal.

 

[Octoberist]

I think Dreamworks wore itself way too thin, by having starting that 3 movies template. It's too much, and thus far, only one of them is worth anyone's while.

It's like they're not striving to create any Kung Fu Panda or Dragon. For example, Home looks so generic and awful.

 

[Pickleweasel]

I'm not sure how I feel about this. When Disney acquired Marvel and Star Wars, it was a case of a huge company already well known for producing quality entertainment acquiring some beloved intellectual properties.

Hasbro is a toy company, known for being involved with movie franchises that are mediocre on their best day. That they will be the controlling stakeholder of Dreamwork animation, and not the other way around, may be a tail wagging the dog situation.

This is from November and was debunked like 3 days later. Idk why you bumped it...