It's a toy story with a difference: yesterday it emerged that toy manufacturer giant Hasbro is in negotiations with Dreamworks with a view to a possible takeover. So why were Hasbro shares trading low when the markets opened this morning? Because investors are concerned that the deal might endanger its existing partnership with Dreamworks rival Disney, which has become increasingly important as improving standards of living in the Far East have created an unprecedented demand for film-themed toys.
Dreamworks, which recently released The Hundred-Foot Journey and is currently working on an adaptation of Roald Dahl classic The BFG, is riding high, with a current valuation of $2.56bn. It has also acquired the rights to the Light Between Oceans and signed up Michael Fassbender and Rachel Weisz to star. It has yet to comment on the interest from Hasbro.
Although a successful deal could potentially terminate Hasbro's right to make lucrative superhero toys, the toy company would potentially gain access to Dreamworks properties like Shrek whose merchandise potential has never been fully developed.