Paul Allen, co-founder of Microsoft Corp. (MSFT) and the largest shareholder in DreamWorks Animation SKG Inc., has exercised his right to demand a secondary stock offering from the company, according to the Wall Street Journal.
"The company and the board have received Paul's request, and will determine the appropriate timing for the offering," said DreamWorks President Lew Coleman in a statement.
Allen will get back $220 million in the secondary offering, of a total of $300 million. His original investment in the Dreamworks venture was $700 million. He got back $130 million of that when he went public.
This could definitely put some short-term pressure on the company, but most analysts think over the long run it will help the troubled company.
One of the benefits will be that Holdco, and investment company of Allen and other major investors, will be basically dismantled and make the corporate structure of the company much more simple. When Holdco is broken up, Allen will take out the remainder owed of his original investment: $350 million.
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