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Paramount prepares DreamWorks bid

Viacom Inc. unit Paramount Pictures is preparing to bid for live action film studio DreamWorks SKG, which is already in talks with General Electric Co.'s  NBC Universal, the Wall Street Journal reported on Friday.
/ Source: Reuters

Viacom Inc. unit Paramount Pictures is preparing to bid for live action film studio DreamWorks SKG, which is already in talks with General Electric Co.'s NBC Universal, the Wall Street Journal reported on Friday.

(MSNBC is Microsoft-NBC joint venture.)

Citing people familiar with the situation, the newspaper said Viacom's board approved the planned bid on Thursday if outside investors put up most of the money for the offer.

Paramount has been in talks with investors since November to raise about $800 million, one source told the Journal. The paper said it is unclear if it has investors lined up yet.

DreamWorks, formed in 1994 by Steven Spielberg, David Geffen and Jeffrey Katzenberg, is looking for a price of about $1 billion plus the assumption of debt, the newspaper said.

By acquiring the studio, Paramount would be gaining Spielberg as a producer, would win control of DreamWorks' 60-film library and the right to distribute movies by separate, publicly-traded DreamWorks Animation SKG Inc.

Viacom plans to split into two companies by the end of 2005, with Tom Freston becoming chief executive officer of Viacom, which will own Paramount, MTV and other assets.

The other company, CBS Corp., will be run by Les Moonves and will own the CBS television network, Infinity Broadcasting and other assets.

Paramount had explored making a bid for DreamWorks earlier, but Viacom's board told the studio then that it could not support such a large investment while it is going through its split, according to the report.

One source told the Journal that due to concerns about a bidding war, Viacom has expressed a preference for exclusivity in its talks with DreamWorks.