Reports: Hasbro Ends Merger Talks With DreamWorks Animation

(RTTNews) - Toymaker Hasbro, Inc. (HAS) has ended merger talks with Jeffrey Katzenberg's animation studio DreamWorks Animation SKG Inc. (DWA), according to media reports on Monday. Shares of DreamWorks tumbled more than 14 percent in the regular trading session following the news.

Last week, media reports had indicated that Hasbro was in talks to buy DreamWorks Animation, resulting in a merger of the parent companies of the Transformers and Shrek.

DreamWorks, with a market value of around $1.9 billion, was said to be seeking about $35 per share in a merger deal. Hasbro already has a 40 percent stake in Discovery Family Channel, and the deal with DreamWorks would have strengthened its involvement in film and television.

According to media reports, a steep decline in Hasbro's stock price after the talks were made public and concerns expressed by executives of Walt Disney Co. (DIS) about a merger between Hasbro and Disney's rival DreamWorks resulted in negotiations between the two companies falling through.

In late September, Hasbro announced a new strategic merchandising relationship with Disney Consumer Products for the Disney Princess and Frozen properties. Under the deal, Hasbro gained global rights, excluding Japan, to develop dolls based on Disney Princess stories and characters, including Cinderella, Beauty and The Beast, and The Little Mermaid as well as Frozen beginning in 2016.

Disney was said to be upset that Hasbro was in talks with DreamWorks about a merger just weeks after it signed the lucrative Princesses contract with Hasbro.

Reports had emerged in early September that Japanese telecom company Softbank Corp. (SFTBF.PK) was in talks to acquire DreamWorks. Softbank was said to have made an offer of $3.4 billion offer that valued DreamWorks at $32 per share. However, by the end of the month it was reported that the talks between the two had cooled.

HAS closed Monday's regular trading session at $56.37, up $2.35 or 4.35 percent on a volume of 2.11 million shares. However, in after-hours, the stock declined $0.10 or 0.18 percent to $56.27.

DWA closed the regular trading session at $22.31, down $3.71 or 14.26 percent on a volume of 5.78 million shares. In after-hours, the stock gained $0.11 or 0.49 percent to $22.42.