DreamWorks Animation shares jumped in early trading 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 trading. 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’s interest broke, 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.
DreamWorks Animation’s stock has a history of leaping on reports of a takeover interest, only for its strength to wane 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 of months later.
However, analysts noted Wednesday that a tie-up with Comcast could have better chances than past takeover talks did. 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 that Comcast appears to be following Disney’s playbook of investing in intellectual property that could be valuable for theme parks and consumer-product licensing.