DreamWorks aims to raise £356m

13 April 2012

DREAMWORKS, the film studio behind the billion-pound Shrek franchise, plans to spin off and float its loss-making animation division as it attempts to ramp up production. The film studio - launched 10 years ago by Steven Spielberg, Jeffrey Katzenberg and David Geffen - said in a filing with the US Securities and Exchange Commission that it plans to raise $650m (£356m) through an initial public offering (IPO) of its shares.

It is the latest move to restructure the DreamWorks business following the sale of its music division and its decision to abandon its video game and internet ventures.

DreamWorks did not mention the expected pricing or timing of the IPO.

But it revealed that the animation division had lost more than $350m (£191.7m) over the past five years.

Last year alone the animation division lost $189m (£103.5m) on $296m (£162m) in revenue.

Analysts suggested management could sell up to 25% of the company's shares which would give the spin-off business an implied value of between $2.6bn (£1.4bn) and $3.25bn (£1.78bn).

DreamWorks plans to use $175m (£95.8m) of the funds raised as working capital with the rest to pay off debt.

The new company, to be called DreamWorks Animation, plans to pump out at least two computer-animated films a year and needs the extra capital to fend off stiff competition from arch-rival Pixar, which created the smash hit Finding Nemo.

Create a FREE account to continue reading

eros

Registration is a free and easy way to support our journalism.

Join our community where you can: comment on stories; sign up to newsletters; enter competitions and access content on our app.

Your email address

Must be at least 6 characters, include an upper and lower case character and a number

You must be at least 18 years old to create an account

* Required fields

Already have an account? SIGN IN

By clicking Create Account you confirm that your data has been entered correctly and you have read and agree to our Terms of use , Cookie policy and Privacy policy .

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged in