Shares in Jeffrey Katzenberg‘s animation studio pop 16 percent on speculation Comcast is aims to buy it at roughly a 25 to 30 percent premium
DreamWorks Animation shares jumped in early trade Wednesday, after news emerged late Tuesday that Comcast is in talks to acquire the animation studio in a deal worth more than $3 billion.
DreamWorks Animation’s stock rose 16 percent to $31.32 a share in early trade. A $3 billion deal value implies a bid worth about $34 to $35 a share, at least a 25 percent premium to Tuesday’s closing price.
Before the news of Comcast interest, DreamWorks Animation shares were essentially trading right where they were a year earlier, up just 1.7 percent over the last 12 months.
Comcast’s Class A shares traded 1.3 percent higher at $61.86. The cable giant earlier Wednesday reported better-than-expected financial results, as it expanded its base of video customers despite an overall weak pay-TV market.
DreamWork’s Animation stock has a history of leaping on reports of a takeover interest, only for the strength to disappear when a deal evaporates. The latest takeover speculation follows a failed acquisition offer from SoftBank in 2014 and another unsuccessful merger negotiation with Hasbro a couple months later.
However, analysts noted Wednesday that a tie-up with Comcast could have better chances than past takeover talks. DreamWorks Animation’s ownership of teen digital-video darling AwesomenessTV, its strengthened consumer products and access to China make it more attractive to Comcast, PiperJaffray analyst Michael J. Olson said. FBR analyst Barton Crockett noted Comcast appears to be following Disney’s playbook of investing in intellectual property that could be valuable for theme parks and consumer-product licensing.