DreamWorks IPO Set at 29M Shares, $23-$25

DreamWorks Animation SKG Inc. (search) set Tuesday its planned initial public offering at 29 million Class A common shares at an estimated price of $23 to $25 per share, which could bring in more than $600 million for the company.

Movie studio DreamWorks is spinning off its animation unit in the IPO, which has DreamWorks Animation offering 25 million shares and shareholders selling an additional 4 million shares, according to an amended offering document filed with the Securities and Exchange Commission (search).

The deal could raise as much as $625 million for the company, assuming the company sold 25 million shares at $25 each.

Microsoft co-founder Paul Allen (search), DreamWorks Animation's largest Class A shareholder, will sell 2.3 million shares in the IPO.

After the offering, Allen will own 34.5 million Class A shares and will have 4.4 percent total voting power.

Other selling shareholders include Vivendi Universal Entertainment (search), which is selling 494,697 Class A shares in the IPO.

DreamWorks founders Jeffrey Katzenberg (search) and David Geffen (search) will not sell off any of their stake during the IPO.

According to the filing, DreamWorks Animation will use $175.5 million of the proceeds for general corporate purposes, including working capital and acquisitions.

The rest of the proceeds will be used to repay $355 million of the $405 million in debt owed to HBO that the company is assuming from DreamWorks Studios as part of the spinoff.

The underwriters, led by Goldman Sachs and JPMorgan, will have the right to buy an additional 4.35 million shares to cover over-allotments.

The stock is expected to trade on the New York Stock Exchange (search) under the ticker symbol "DWA.N" .