SoftBank's talks to acquire DreamWorks Animation have cooled, according to sources quoted by Reuters. The report comes less than two days after word first emerged of the talks.
A SoftBank source told the news agency talks had taken place with DreamWorks Animation but they did not appear to be going anywhere.
Two bankers at separate institutions in Japan said SoftBank's interest had cooled even before media reports emerged over the weekend about the discussions, with one citing price as a dissuading factor.
"Their interest briefly picked up, but the price being what it was, it has now cooled," one of the sources said. However, sources quoted by the Wall Street Journal say it remains possible that negotiations could restart.
The two sides could ultimately strike a deal other than an outright takeover, one of the people said, for instance, some kind of content partnership.
DreamWorks shares spiked on the initial report, rising 26 per cent Monday (September 29th). But, after news of the talks cooling, the company's shares fell eight per cent in after-hours trading.
The studio is best known for successful movie franchises including "Shrek" and "Madagascar," but had recent releases such as "Rise of the Guardians" and "Turbo" that were box-office disappointments.
Its talks about taking on a Japanese owner highlight the challenges facing Hollywood's smaller studios in remaining independent and could prompt a string of other deals, according to Reuters.
While interest in the deal now appeared cool, the development could make other independent studios the targets of larger players, or prompt them to seek outside buyers or investors.
Find up to date information on the FTSE 100 and spread betting strategies at City Index.
StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.