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What's happening
Shares of Dreamworks Animation (DWA) are trading 22% higher this afternoon after news broke on Sunday that Japan's SoftBank was in talks to acquire or otherwise partner with the Hollywood studio famous for Shrek and other non-Pixar 3D-animated blockbusters.
Why it's happening
Major financial journals have reported that SoftBank has offered $32 per share for Dreamworks -- a 17% premium over the current $27.30 share price. The wide discrepancy between the reported offer and Dreamworks' current price represents clear skepticism on the market, as the company has been the target of buyout rumors before, most recently in 2009 following Disney's Marvel acquisition. Skepticism may also arise from the fact that the median analyst price target on Dreamworks is just $22, which was where it closed last week before the buyout rumors began to swirl.
