SoftBank Corp. is investing $250 million in Legendary Entertainment, producer of the “Godzilla” film, gaining some online rights to the independent studio’s film, TV and merchandise businesses.
SoftBank will acquire 7.5 percent to 10 percent of Legendary, people with knowledge of the situation said, suggesting a valuation of more than $3 billion for the closely held studio. The Tokyo-based company may increase the investment to as much as $1 billion in two stages by 2018, said the people, who sought anonymity because the terms are private.
The accord provides Legendary with fresh capital for growth and gives Masayoshi Son’s SoftBankfilms and TV shows for networks it controls. The companies will form a venture to develop online and mobile services, with a focus on India and China, according to a statement. Other terms weren’t disclosed.
“The acquisition is positive for SoftBank in that it can strengthen its revenue base and its long-term goal is to become a number one Internet company,” said Tomoaki Kawasaki, a Tokyo- based analyst with Iwai Cosmo Securities Co Ltd. “It could be possible that SoftBank will acquire more content companies related with Internet. They may acquire companies that can create synergies.”
SoftBank fell 0.5 percent to 7,457 yen as of 9:39 a.m. in Tokyo. The shares have declined 19 percent this year
Nikesh Arora, vice chairman of SoftBank and head of SoftBank Internet & Media, will join the board of the Burbank, California-based company led by Thomas Tull. SoftBank, which has a market value of about $83 billion, has invested in more than 1,300 technology companies, including a 32 percent stake in Alibaba Group Holding Ltd. worth about $70 billion.
SoftBank is still considering other deals in media and digital technology, said one of the people familiar with the matter.
The company held talks with DreamWorks Animation SKG Inc., people with knowledge of the situation said on Sept. 27. Chances of the company reaching an agreement to acquire the Glendale, California-based studio run by Jeffrey Katzenberg are low, a person familiar with SoftBank’s thinking said later.
Legendary co-produced the “Dark Knight” films before breaking away from distributor Warner Bros., and now has an alliance with Comcast Corp.’s Universal Pictures. Its films have generated more than $9 billion at the global box office, according to its website.
Raine Group LLC acted as financial adviser and Morrison & Foerster LLP acted as legal adviser toSoftBank. Legendary was advised by Martin Willhite, its chief operating officer and general counsel, and O’Melveny & Myers LLP acted as outside legal adviser.
--With assistance from Takashi Amano in Tokyo.