Tokyo, Reuters :
Japan’s SoftBank Corp (9984.T) is in talks to acquire DreamWorks Animation SKG (DWA.O), the Hollywood studio behind the “Shrek” and “Madagascar” movie hits, a person with knowledge of the situation said.
An acquisition of DreamWorks by SoftBank would make it part of a cash-rich Japanese communications and media company that, under founder and chief executive Masayoshi Son, has shown a willingness to take big bets on combining disparate businesses.
The talks were first reported by the Hollywood Reporter, which quoted an unidentified source as saying a buyout would value DreamWorks at $3.4 billion.
The entertainment trade publication said SoftBank had offered $32 per share for DreamWorks, a substantial premium to the stock’s Friday closing price of $22.36.
Buying DreamWorks, which is headed by veteran Hollywood producer and film executive Jeffrey Katzenberg, would make SoftBank the second Japanese technology company to buy a Hollywood studio, following Sony Corp (6758.T), which bought Columbia Pictures in 1989.
SoftBank has recently cashed in on a share of its investment in Chinese e-commerce giant Alibaba and dropped its pursuit of mobile carrier T-Mobile US (TMUS.N) in the face of opposition from anti-trust regulators in the United States.
Last week, SoftBank booked a $4.6 billion gain on the share listing of Alibaba Group in New York (BABA.N). SoftBank retains a 32 percent stake, making it Alibaba’s biggest shareholder.
SoftBank has significant stakes in other large listed entities, including U.S. mobile carrier Sprint (S.N), through which it had pursued a deal for T-Mobile, internet portal Yahoo Japan (4689.T) and online games maker GungHo Online Entertainment (3765.T).
A SoftBank spokesman said the company had no comment on the reported talks with DreamWorks. A representative of DreamWorks could not be immediately reached for comment.
In July, SoftBank hired former Google (GOOGL.O) executive Nikesh Arora to run a newly created unit called SoftBank Internet and Media, reporting directly to Son, in a move that stoked speculation the telecommunications company could be considering a move to acquire content production assets.
SoftBank held the equivalent of more than $17 billion in cash and equivalents as of the end of June, its most recent reported quarter.
DreamWorks, based in Glendale, California, has seen its share price has drop 37 percent this year after two consecutive quarterly losses, a string of weak-performing releases such as “Mr. Peabody & Sherman” and investor concern about the production costs of its movies.
