DREAMWORKS ANIMATION DEBUTS TODAY.

Byline: Greg Hernandez Staff Writer

GLENDALE - Riding the tail of a shark, DreamWorks Animation Inc. arrives on Wall Street today in the most high-profile entertainment company initial public offering in years.

DreamWorks Animation, spinning off from privately held parent DreamWorks SKG, will be going head-to-head against Pixar Animation Studios, which went public nine years ago and currently dominates the sector.

``DreamWorks is going to have an easier time in the marketplace because Pixar was the one slashing through the vegetation with a machete trying to clear a path,'' said David Menlow, president of IPO research firm IPOFinancial.com. ``They have done so successfully after a number of years in the marketplace and have confirmed that the technology will be the standard for animation.''

DreamWorks' ``Shark Tale'' spent three weeks as the nation's No. 1 movie and had grossed $138.1 million at the box office as of Tuesday. Its success comes as the studio's ``Shrek 2,'' which went on to become the highest-grossing animated film of all time ($436.7 million domestically), is set to debut on DVD Nov. 5. The company's next computer-generated feature, ``Madagascar,'' will be released next spring.

But there is heavy animated competition coming out over the next several weeks. The next Pixar movie, ``The Incredibles,'' will be released by Disney on the same day ``Shrek 2'' hits retail stores. Five days later, Warner Bros. will release the animated film ``The Polar Express'' featuring Tom Hanks.

``You are now in a period where other animation (is) coming in ... so there's a lot of product out there,'' said independent media analyst Dennis McAlpine. ``Everybody thinks it's a good climate.''

Underwriters set the terms for the DreamWorks IPO at 29 million shares with a price of $28 per share, higher than the estimate earlier this month of $23 to $25. At $28 per share, the company would raise $812 million.

The animation company will be separate from the parent company formed 10 years ago by Jeffrey Katzenberg, Steven Spielberg and David Geffen and will trade on the New York Stock Exchange under the ticker symbol DWA.

The DreamWorks animation unit has released such hits as ``Shrek 2,'' ``Shrek,'' ``Shark Tale'' and ``Antz.'' But its traditional hand-drawn movies, including ``Sinbad: Legend of the Seven Seas'' and ``Spirit: Stallion of the Cimarron,'' have not fared nearly as well. On the television side, the DreamWorks animated series ``Father of the Pride'' has not been a big ratings hit for NBC.

In contrast, Pixar has had an unbroken string of blockbusters including ``Finding Nemo,'' ``Monsters Inc.,'' ``Toy Story'' and ``Toy Story 2.'' But when Pixar first went public in November 1995, computer animation was still in its early days. Pixar priced its IPO of 6.9 million shares at $22 each. On Wednesday, shares closed at $79.82.

Greg Hernandez, [phone]

greg.hernandez(at)dailynews.com

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(color) DreamWorks SKG, maker of the blockbuster ``Shrek,'' is spinning off its animation unit into a separate entity today.