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Post by The Ultimate Nullifier on Nov 14, 2014 18:46:17 GMT -6
deadline.com/2014/11/dreamworks-animation-and-hasbro-merger-talks-off-for-now-1201284816/DreamWorks Animation And Hasbro Merger Talks Off For Now DreamWorks Animation’s merger talks with Hasbro have stopped, two days after Deadline reported that Jeffrey Katzenberg’s indie studio and the toymaker were far into negotiations to combine into what would be an entertainment power. On Thursday, the day after the news broke, DWA’s market value appreciated about $300 million to $2.2 billion as its share price rose as high as 16%. But Hasbro stock has fallen the past two days, with some analysts questioning whether Katzenberg’s asking price of $35 a share was too steep. DWA shares ended the week at $26.02. There had been a flurry of meetings and talks for the past couple of weeks, but we’re hearing that those discussions have come to an end. While it seems negotiations have likely ceased, it might be a situation of never-say-never, according to sources close to the situation. This is the second time a potential DWA sale has faltered, after Softbank and DWA had discussions about a deal. Like with Hasbro, analysts noted the value of DWA in such a deal did not make sense for the other party.
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Post by The Ultimate Nullifier on Nov 14, 2014 18:52:51 GMT -6
www.hollywoodreporter.com/news/dreamworks-animation-hasbro-end-merger-749215DreamWorks Animation and Hasbro End Merger Talks Shares of the toymaker fell when Wall Street learned of a potential deal Hasbro has called off merger negotiations with DreamWorks Animation, sources tell The Hollywood Reporter. The deal chatter, which became public on Wednesday, appears to have been derailed in part by the performance of Hasbro's stock and potentially the high price sought by DreamWorks Animation CEO Jeffrey Katzenberg. Shares of the toymaker fell dramatically on Thursday after news of the negotiations broke. Reached on Friday, DreamWorks Animation declined to comment. Hasbro is the second major merger target for DWA in recent weeks. THR first revealed talks with Japanese giant Softbank in September, but those negotiations collapsed days after they became public. DreamWorks Animation had been seeking $35 a share from Hasbro, but many Wall Street analysts deemed the price steep and said so in research notes published Thursday and Friday. Investors apparently agreed, because a day after the merger negotiations were leaked — including the $35 per share price tag — shares of DreamWorks rose just 14 percent to $25.52, a hefty 37 percent below what the studio had been asking. Hasbro shares on Thursday lost 4 percent, wiping about $300 million from its market capitalization, and the stock fell another 2 percent on Friday, apparently enough to scare the toymaker's board of directors from further negotiations. In theory, a marriage of Hasbro and DreamWorks Animation made sense, given that the former has been looking to beef up its presence in TV and film while the latter has wanted to diversify its revenue stream in an effort to more consistently grow the company. Katzenberg famously said a year ago, in fact, that movies "are not a growth business," a sentiment that led to derision from his industry peers. As desirable as properties like Shrek, Madagascar and Kung Fu Panda might have been to Hasbro, though, many on Wall Street said the toymaker has been breaking into TV and film well enough on its own. It not only controls toy brands such as Transformers and G.I. Joe, each of which are popular movie franchises, but it also has in the works a Fox movie based on the card game Magic: The Gathering, a Sony movie based on the Candy Land board game, plus others in various stages of development. Among the analysts who were critical of the potential merger was Richard Greenfield of BTIG. "Dear Hasbro: Why you should not buy DreamWorks Animation," he titled a blog post on Friday. "Unfortunately for DreamWorks Animation," Greenfield wrote, "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 valuation that management supposedly covets."
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Post by The Ultimate Nullifier on Nov 14, 2014 19:07:31 GMT -6
variety.com/2014/biz/news/dreamworks-animation-sale-talks-with-hasbro-end-1201356896/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 can confirm. The toymaker ended conversations with the toon studio on Friday, causing DWA’s stock to plummet more than $2 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, location-based entertainment business. There were several factors that led to the talks ending 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 talks of the merger were reported to have ended. Analysts criticized the deal, especially the price DWA was asking for, 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 it 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 underway 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 of both sides parting 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.
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