DreamWorks shares plunge after merger talks with Hasbro end

Hollywood studio behind Shrek reportedly seeking $3 billion valuation

(DREAMWORKS)

Shares in DreamWorks, the animation studio behind titles 'How to Train Your Dragon' and 'Shrek', plunged on Monday after media reports suggested Hasbro's takeover bid has been scrapped.

Shares slumped 14 per cent in New York trading, the biggest one-day loss since the company went public in October 2004, after Reuters reported Hasbro's board has opted out, citing a person familiar with the matter.

Tensions reportedly emerged between chief executive Jeffrey Katzenberg and Hasbro over a possible valuation. The studio was reportedly seeking $3 billion, or $38 a share. Hasbro never made an official bid and talks were said to be at a "preliminary" stage.

The collapse in talks marks the second time a reported suitor backs out of a potential deal. In September, Japan's Softbank was said to be in talks with over a possible takeover, but negotiations ended.

DreamWorks has disappointed investors following the poor performance of some of its recent films, including Rise of the Guardians and Turbo, which have failed to replicate the success of the popular Shrek franchise.