Hasbro DreamWorks Talks End With No Deal

Variety has confirmed that a $2.3 billion deal between Hasbro and DreamWorks Animation that was being negotiated has ended without a deal being forged.

On Friday, negotiations about the deal were ended, causing DreamWorks Animation stock to decrease more than $2.50 at the end of the day on Wall Street.

While rumors will fly over what really happened, the two companies were said to be in early stages and agreement when the deal broke off.

Many things were involved in what caused the talks to end.

Brian Golden, CEO at Hasbro, said that he had grown insecure because of the effect the talk of the deal was having on the company’s stock driving it down by 4% one day and over 1% the next.

Investors showed their pleasure when talks broke off between the two companies, which seem to give Hasbro executives assurance that their decision was the right one.

Analysts thought that the price DreamWorks was asking for was just simply too high, as it varied from $30 to $35 a share. In the eyes of many critics, it was too high.

DreamWorks Animation could have easily been a great acquisition since being targeted following its success with Shrek2, which was released in 2004. One analyst stated that DreamWorks’ performance was inconsistent making surprising that the company would request such a high per share price to sell.

Most industry analysts felt that Hasbro’s offer was in line with the market value of DreamWorks.

Nevertheless, management at DreamWorks felt their company was worth much more making in nearly impossible for the two companies to reach an agreement on a sales price.

Neither Hasbro nor DreamWorks has said why the deal fell apart, they have also not said what the price per share Hasbro offered and what price per share DreamWorks was asking.

Hasbro has handled many other deals over time and will look into other possibly acquisitions going forward as a way to increase its toy sales.

The competition in the industry, with No. 1 seller Mattel, has increased making it necessary for the company to find alternative forms of income.

 

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