Japan's SoftBank May Acquire American Film Company DreamWorks

The Japanese SoftBank Corp. may acquire the American DreamWorks Animation SKG Inc., according to the Hollywood Reporter, which cited a source with knowledge of the situation. The purchase price would value the company at about $3.4 billion.

SoftBank is a conglomerate with interests in online and telecommunications companies, such as Alibaba Group Holding Ltd., which recently conducted the biggest initial public offering in history. DreamWorks is a creator of film, live and television entertainment properties, such as the “Shrek,” “Madagascar” and “Kung Fu Panda” movie franchises.

If the deal were to be made, then DreamWorks CEO Jeffrey Katzenberg, 63, would sign a five-year contract to remain with the company, which will be 20 years old next month, the Reporter said. Its source also told it DreamWorks held an emergency board meeting Thursday to discuss the SoftBank offer.

DreamWorks was founded in 1994, after Katzenberg resigned as a top executive at the Walt Disney Co. The Hollywood heavyweight enlisted the help of filmmaker Steven Spielberg and entertainment magnate David Geffen to create the company, which received $500 million in funding from the Microsoft Corp.

During the next two decades, DreamWorks created a string of popular film franchises, encompassing “How to Train Your Dragon.” The company has had a 30-picture distribution deal with Walt Disney since 2009, including movies such as “I Am Number Four,” “The Help” and “War Horse.”

The Hollywood Reporter said SoftBank offered DreamWorks $32 per share to close the deal, This represents a significant premium, as DWA’s share price closed at $22.36 Friday.

Meanwhile, SoftBank is the biggest single investor in Alibaba, with about a 32 percent stake in the Chinese online-commerce company last week. It also holds significant stakes in other major corporations, such as the mobile carrier Sprint Communications Inc.

SoftBank was valued at $92 billion last April, the Wall Street Journal reported. Its CEO, Masayoshi Son, 57, is called the “second-richest man in Japan” with a net worth of more than $14 billion. This year, Son abandoned bidding for T-Mobile US Inc., the fourth-largest U.S. cellular service, after deciding American antitrust laws would not allow such a deal in the mobile industry, which is dominated by only a few large companies, including Sprint.

Son, a savvy businessman who is well known for taking financial risks, told investors in July he wants to grow SoftBank into the largest company in the world and that he is building it to last 300 years. The New York Times reported his colleagues have said he is strongly invested in the U.S. market, seeing it as a place to grow SoftBank’s involvement in the media industry.