SoftBank to Invest $250M in Legendary

Days after it sent the stock of DreamWorks Animation into a tizzy, Japanese wireless carrier SoftBank said it will invest $250 million in Legendary Entertainment and will form a joint venture with the movie studio to leverage its intellectual property and premium content worldwide.

The announcement of the investment came just days after speculation swirled that SoftBank had made a $3.4 billion offer to buy DreamWorks Animation, a possible effort to gain a content foothold for its growling technology assets. SoftBank is the third largest wireless carrier in Japan but also owns a controlling stake in U.S. wireless company Sprint and a 30% of Chinese e-commerce company Alibaba.

According to SoftBank, the Legendary joint venture will allow the carrier to exploit the studio’s intellectual property rights in television, digital, licensing and merchandising and other ancillary lines, and across various "over-the-top"/mobile platforms with a particular focus on the burgeoning China and India markets.

In a statement, vice chairman of Sofbank and CEO of SoftBank Internet and Media, Inc. (SIMI) Nikesh Arora, said the goal of the SIMI unit is to “leverage SoftBank's international platform and network of Internet and media partners to accelerate content creators' digital strategies and extend their global reach.  Legendary is already a content powerhouse and we are very excited to make this investment and help them bring their incredibly successful film franchises and other exciting new media content to an even larger global audience."

SoftBank's investment is expected to close later this month, subject to certain conditions and Arora will be appointed to Legendary's board of directors as part of this investment.

DreamWorks Animation stock soared as much as 30% earlier this week after reports surfaced that SoftBank was in talks to acquire the studio. When later reports said that SoftBank had turned its attention to Legendary, the stock began to pull back.

Legendary Entertainment has produced such hits as The Dark Knight and The Hangover series of films. The company also announced a partnership with just-retired New York Yankees shortstop Derek Jeter for the digital media startup, The Players Tribune.

"Masayoshi Son has built SoftBank into one of the world's most respected companies,” said Legendary's chairman and CEO, Thomas Tull in a statement.  “With the arrival of Nikesh and the launch of SIMI, they have a great opportunity to extend their reach into media and entertainment.  We are excited to be one of SIMI's first partners and look forward to working together to deliver the next phase of Legendary's growth."

The Raine Group LLC acted as financial advisor and Morrison & Foerster LLP acted as legal advisor to SoftBank. Martin Willhite, COO & General Counsel represented Legendary and O'Melveny & Myers LLP acted as outside legal advisor.