NBC Universal may buy DreamWorks SKG after all.
Two weeks after abruptly halting talks with NBC Universal, DreamWorks' owners received a counterproposal Friday from the General Electric Co.-owned studio, according to four sources close to the matter.
Terms of the offer were unknown, but one source, who declined to be identified because of the sensitivity of the negotiations, said that it was attractive enough to put the deal back on track. Earlier this month NBC Universal had balked at DreamWorks' $1-billion-plus asking price.
DreamWorks and NBC Universal executives declined to comment.
Meanwhile, another suitor has surfaced for the live-action studio, which was founded 11 years ago by David Geffen, Jeffrey Katzenberg and Steven Spielberg: Paramount Pictures
In recent weeks, Paramount, a unit of Viacom Inc., has initiated discussions with DreamWorks, according to sources familiar with both sides of the talks. Although the talks are described as serious, sources cautioned that Paramount was in the exploratory stages and was still weighing whether to make a bid for DreamWorks.
If a deal were to be struck, Paramount would need to get approval from the Viacom board.
Last month, a day before an exclusive two-month negotiating window with NBC Universal was to close, Geffen stormed away from the bargaining table after NBC Universal suddenly reduced its offer from $1 billion to about $900 million, according to sources. (Those figures don't include $500 million in DreamWorks debt that NBC Universal would have assumed under both offers.)
Geffen surmised at the time that Universal's corporate parent, GE, decided to lower its bid after DreamWorks' costly special-effects film "The Island," directed by Michael Bay, flopped and its romantic comedy "Just Like Heaven" had a disappointing debut.
Universal insiders said GE was concerned that the expected return on investment was not large enough to justify a $1-billion purchase price.
According to sources, when the deal with Universal collapsed, Paramount Pictures Chairman Brad Grey wasted no time in reaching out to Geffen.
Grey, who has been aggressively revamping the struggling movie studio since taking the helm in March, is said to be eager to add DreamWorks to the Paramount family.
A deal would give the studio access not only to more live-action films -- including such Oscar-winning blockbusters as "Gladiator" and "American Beauty" -- but also to something Paramount sorely lacks: animated fare.
