Dreamworks Animation Skg Inc (DWA) stock was up on Wednesday following rumors that Comcast Corporation (CMCSA) is considering acquiring it.
The rumor claims that Comcast is putting up $3 billion to acquire Dreamworks Animation, which is a quite the premium over its $2.3 billion market value. If this deal does happen, it could help CMCSA better compete against Walt Disney Co (DIS).
Dreamworks had to layoff employees last year due to poor box-office performances. This is partially due to its more expensive production costs when compared to rivals, such as Illumination Entertainment, which belongs to Comcast’s Universal Pictures. Rumors of the deal claims that the merger would still see Dreamworks and Illumination act as separate brands, reports The Wall Street Journal.
“Comcast is, no doubt, attracted as much by DreamWorks’ library and intellectual property as by what they might do next,” Craig Moffett, a cable analyst, told The Los Angeles Times. “It is likely the content library and characters that appeal.”
DWA shares were up 15% as of Wednesday morning.
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