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Shares of DreamWorks Animation (NASDAQ:DWA) fell as much as 15% on Monday November 17, 2014 after The Wall Street Journal reported (may require subscription) that acquisition talks with Hasbro (NASDAQ:HAS) have "cooled."
Why it's happening
According to "a person familiar with the matter," The Wall Street Journal has stated that the talks -- news of which first surfaced last week -- were slowed by disagreements surrounding the proposed structure of the combined company. Keeping in mind Dreamworks CEO Jeffrey Katzenberg was said to be seeking an offer of at least $30 per share, WSJ also noted a final price has not been reached.
On the flip side, shares of Hasbro simultaneously rose more than 4% today, underscoring the market's worries given both the deal's various risks and relatively large size. This doesn't mean the talks are finished, but at the same time serves as a reminder there are no guarantees in the unpredictable world of mergers and acquisitions. In the end, acquisition or not, investors would be wise to continue focusing first on the promise of these individual businesses and not focusing too much on rumors.