NBC Universal is back in the hunt to buy DreamWorks SKG.

(The Hollywood Reporter) -- NBC Universal is back in the hunt to buy DreamWorks SKG.

Although DreamWorks broke off exclusive talks three weeks ago, NBC Uni made a new offer on Oct. 14, according to several sources familiar with the situation. At the same time, Viacom's Paramount Pictures has also begun exploratory discussions with the 11-year-old DreamWorks, although it has not yet submitted an offer of its own.

DreamWorks co-founder David Geffen, with the blessing of Steven Spielberg, ended the first round of talks last month when NBC Uni revised an offer of about $1 billion, plus the assumption of $500 million in debt, downward by about $100 million. Terms of the new offer, which was first reported Oct. 15 in the Los Angeles Times, could not be determined.

Spokespersons for Universal and DreamWorks declined comment. Spokespersons for NBC Uni did not respond to similar calls.

Although Geffen said at the time that he and his fellow founding partners, Spielberg and Jeffrey Katzenberg, would be happy to remain a private, independent company, Ron Meyer, president/COO of Universal Studios, continued to argue the merits of making a deal in his conversations with executives at NBC Universal and its parent company General Electric. They had raised concerns about DreamWorks' asking price, particularly after the boxoffice failure of such recent releases as the "The Island."

At the same time, Brad Grey, Paramount Pictures' new chairman, with the approval of Viacom co-president/co-COO Tom Freston, moved quickly to open up his own preliminary talks with Geffen. However, though Viacom has begun its own due diligence, because the company is preoccupied with plans to split in two next year, it has not yet reached the point of putting forward an actual offer approved by its board. Spokesmen for both Viacom and Paramount declined comment.

Paramount's discussions have remained in early exploratory stages with no guarantee that they will lead to a formal bid, sources said.

Universal and Paramount are both driven by similar motivations, though. The two studios are in the process of breaking up United International Pictures, their 24-year-old international distribution partnership. Beginning in 2007, each company will distribute its own films in 15 countries around the world. And that will create pressure for both of them to secure new product to fill the pipeline.

By acquiring DreamWorks, either studio would pick up not just DreamWorks' library of 60 titles, but also future films from its live-action production arm. In addition, DreamWorks distributes the animated films produced by DreamWorks Animation, which was spun off last year as a publicly traded company, and those distribution rights could represent a significant source of revenue for any company taking over DreamWorks.

Universal has added motivation for making a deal. It currently distributes DreamWorks' films abroad through UIP. But with the UIP breakup, DreamWorks will be free to offer its product to other international distributors.

Jeff Immelt, GE chairman/CEO, was asked about the reasons for NBC Uni's failure to reach a DreamWorks deal in his firm's third-quarter earnings conference call on Oct. 14. Although he didn't directly answer the question, he said management is happy with GE's current asset portfolio and would only make acquisitions at prices and conditions that make real sense for it.

NBC Uni's latest stab at DreamWorks became known only after the conference call.

NBC Uni has seen its film division perform well, while its TV assets have faced challenges due to the NBC network's rebuilding of its primetime schedule.