DreamWorks Soars 20% As WSJ Reports A Potential Comcast Buyout

Shares of Dreamworks Animation Skg Inc (NASDAQ: DWA) soared higher by more than 20 percent early Wednesday morning after the Wall Street Journal reported the company is being eyed as a potential acquisition target.

The Wall Street Journal, citing "people familiar with the matter," stated that Comcast Corporation (NASDAQ: CMCSA) is in talks to acquire the movie studio for more than $3 billion. The publication noted that Comcast's own movie studio, Universal Pictures, has seen recent success in animated films but it remains a "relatively small player."

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The price tag on a deal is said to be more than $3 billion, a premium to DreamWorks' $2.34 billion valuation as of Tuesday's market close.

DreamWorks' portfolio of franchises include "Shrek," "Kung Fu Panda," "Madagascar," among others. Comcast can leverage the success of these franchises and follow Walt Disney Co (NYSE: DIS)'s strategy of building out consumer products and theme parks, the Wall Street Journal suggested.

DreamWorks has been shopping for a sale of itself for several years. In 2014, the company was said to be in talks with Hasbro, Inc. (NASDAQ: HAS).

Shares of Comcast were trading higher by more than 2 percent Wednesday morning following a top and bottom line beat in its first-quarter results.