NEW YORK (CNNfn) - New-media investor and Microsoft co-founder Paul Allen is poised to become the largest single shareholder of DreamWorks SKG, the upstart studio created by three of Hollywood's leading entertainment moguls, after agreeing to acquire more than half of a South Korean conglomerate's stake in the company, according to a published report.
The conglomerate, Cheil Jedang Corp., announced in 1995 that it planned to invest $300 million in DreamWorks, an equity purchase that would have given it an 11 percent stake in the company, the Wall Street Journal reported Wednesday. But the economic turmoil in Asia reportedly forced Cheil to back away from its initial ambitions, at the South Korean government's behest.
The Journal said Allen intended to pay the full price to buy the unfunded portion of Cheil's investment in a deal valued at $160 million, based on DreamWorks' net value of about $2.7 billion.
After the transaction, Allen would hold a 24 percent interest, or roughly $660 billion stake, in the company, elevating him to top-shareholder status ahead of the firm's founding gurus, Steven Spielberg, Jeffrey Katzenberg and David Geffen, who each own 22 percent of the firm, the Journal said.
Officials at DreamWorks, based in Universal City, Calif., declined to comment on the reported transaction.
A spokeswoman at Vulcan Ventures Inc., a Bellevue, Wash., company Allen created in 1986 to research and implement his investments, could not immediately be reached for comment.
Allen already controlled an 18 percent stake in DreamWorks, dating from a $500 million investment in the company in 1995, the Journal said.
Allen's investment could prove a boon to DreamWorks, which has struggled to match expectations since its founding to much industry fanfare in 1994.
The studio billed itself as a multi-faceted entertainment powerhouse that would churn out feature films, television programming, interactive software, records and toys.
But it has so far fallen short of the hoopla, by most analysts' estimates. Industry observers will closely watch the box office fortunes of two upcoming feature films, including the World War II epic "Saving Private Ryan" and "The Prince of Egypt," an animated release due out later this year.
After the transaction, Cheil will own 5 percent of DreamWorks, the Journal said.