DreamWorks Animation SKG plans to issue a secondary offering of shares following the Nov. 3 release of its latest CG family flick, Flushed Away, according to The Hollywood Reporter. The toon studio, which went public in October of 2004, was expected to make a secondary offering of 500 shares after the May 2005 release of Madagascar.
The secondary offering was requested by Microsoft co-founder Paul Allen, who has $700 million invested in DreamWorks Animation and stands get around $220 million back. Meanwhile, about $80 million will be divided between investors Lee Ent. and Paramount Pictures, according to analysts. Allen initially saw a $130 million return on his investment when DreamWorks Animation went public. He will get another $350 million in stock once DreamWorks SKG dissolves HoldCo, the holding company it created to pay back principal investors. DreamWorks principals Jeffrey Katzenberg, Steven Spielberg and David Geffen will get a combined $100 million in DWA shares, and Lee Ent. will receive $55 million.
There is speculation that the timing of the offering is strategic for Allen, who will get more shares in DreamWorks Animation if the sale price is lower. The price will certainly drop if Flushed Away underperforms as analysts are predicting. The company is then expected to trade higher as Shrek the Third and Bee Movie approach. DreamWorks Animation shares, which originally went for $28 with its IPO, closed at $23.73 on Wednesday.
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