SoftBank makes $250 million investment in Legendary Entertainment

By Yoshiyasu Shida, Liana B. Baker and Soyoung Kim
A man holding an umbrella walks past the logo of Softbank Corp at its branch in Tokyo April 22, 2014. REUTERS/Yuya Shino

By Yoshiyasu Shida, Liana B. Baker and Soyoung Kim TOKYO/NEW YORK (Reuters) - Japan's SoftBank Corp said on Thursday it is taking a minority stake in privately-held Legendary Entertainment for $250 million and will form a joint venture with the Hollywood movie studio. The venture will exploit Legendary's intellectual property rights including in television and digital with a particular focus on China and India, the companies said, confirming a Reuters report earlier on Thursday. The movie studio, which was founded in 2000 by former investment banker Thomas Tull, has produced hits like "The Dark Knight," "Man of Steel," and the 2014 remake of "Godzilla," as well as "The Hangover" film franchise. Investing in Legendary would give SoftBank access to Hollywood films and television shows and would also broaden the reach of the Japanese company and its founder Masayoshi Son across the U.S. telecoms and media industry. Tull started Legendary Entertainment with $500 million from private equity investors and in 2005, signed a seven-year deal with Warner Brothers to jointly produce up to 40 films. Last year, Comcast Corp's NBCUniversal unit signed Tull, luring him away from rival Warner Brothers, a unit of Time Warner Inc. Legendary generally provides half the financing for movies whose budgets can run up to $200 million or more. It started a comic book unit in 2010 and last year hired Bruce Rosenblum, formerly the head of Warner Brothers TV, to head its television and digital media operations. Legendary also has an agreement with China Film Co, the largest and most influential film company in China, to co-produce movies. SoftBank also held talks to acquire Hollywood studio DreamWorks Animation, although the discussions had cooled and were unlikely to lead to a deal, Reuters reported earlier this week. Shares of DreamWorks were down 7.6 percent to $24.70 in early afternoon trading on Nasdaq. SoftBank said its investment in Legendary is expected to close in October, subject to certain conditions. Nikesh Arora, vice chairman of SoftBank and CEO of SoftBank Internet and Media Inc, will be appointed to Legendary's board as part of the deal. SoftBank has been looking at investing in Legendary for a while and Arora was the catalyst in bringing the two parties into discussions, according to one person with knowledge of the matter. 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. (Reporting by Yoshiyasu Shida in Tokyo, Liana B. Baker and Soyoung Kim in New York; editing by Franklin Paul and G Crosse)