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Talks have fallen flat due to a steep drop in Hasbro's stock prices since the news was leaked last week.

Hasbro and DreamWorks merger talks break down

Negotiations between DreamWorks and Hasbro Inc. have broken down just days after their initial announcement.

Last week, insiders reported that the global toy firm was exploring a potential merger with the animation studio.

However, according to Deadline, the talks have fallen flat, in part due to a steep drop in Hasbro’s stock price since the talks were made public.

According to MarketWatch, Hasbro’s stock has fallen six per cent in the two days since the news was leaked, while shares of DreamWorks rallied 16 per cent.

The recent turn of events have now prompted Wall Street analysts to question the logic of any future merger talks.

“This combination makes no sense to us at all,” said analyst Eric Handler at MKM Partners. “There is no doubt that Hasbro wants to turn a number of it franchise properties in to feature films, but its no risk profile would substantially change entering in to the volatile movie production business.”

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