Although Japan’s SoftBank wasn’t successful in its bid to purchase DreamWorks Animation, DreamWorks CEO Jeffrey Katzenberg continues to seek a buyer for his animation studio. Reports emerged yesterday evening that the studio was in negotiations to merge with toymaker Hasbro, and in a separate deal, may sell a stake in its AwesomenessTV brand to Hearst Publishing.

For the potential Hasbro deal, Katzenberg would lead the combined DreamWorks-Hasbro operation. Hasbro, which has a market capitalization more than three-and-a-half times that of DreamWorks, would pay $35 a share for DreamWorks, according to Deadline’s report. That’s only slightly better than the $32 a share that DreamWorks was offered by SoftBank (DreamWorks stock closed at around $22 yesterday, but has shot up this morning to, at the time of publication, $26).

For years, DreamWorks relied heavily on the consistent success of its animated features, but that model has been in disarray as three of its last five films—Rise Of The Guardians, Turbo, and Mr. Peabody & Sherman—have resulted in writedowns.

To bolster its increasingly hit-and-miss feature business, the studio has focused on diversification by acquiring online channels, moving into series production, expanding its intellectual property base for licensing and merchandising, and growing the company’s presence in China through Oriental Dreamworks.

A deal with Hasbro would further diversify DreamWorks’ operations by giving the studio a toy production businesss. Hasbro itself owns numerous brands including Transformers, G.I. Joe, Monopoly, Play-Doh, Magic: The Gathering, My Little Pony, Nerf, and Care Bears.

The toy manufacturer often licenses its properties to studios for film production and to theme parks for rides, and it also owns a 40% stake in Discovery Family, formerly the Hub Network.

Meanwhile, it was also revealed yesterday that DreamWorks was working on a separate deal to sell off a stake in its AwesomenessTV Internet brand to Hearst Publishing. The deal seems to be primarily designed to provide a cash infusion to DreamWorks. From Deadline:

Hearst would pay $81.25 million for a 25% stake in the Internet video power with $56.25 million going directly to DreamWorks and $25 million used as an investment in ATV. The terms would value ATV at $300 million, double what DreamWorks paid for it in May 2013. Founder Brian Robbins and COO Brett Bouttier would have new, five-year employment agreements.

The [joint venture] would use the additional cash, possibly including a contribution from DreamWorks Animation, to launch three digital channels: A bundle of ATV content, one that targets Moms, and one focusing on kids sports including how-to videos from celebrity athletes.

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