The tech world is buzzing today with the rumor that Goldman Sachs is pushing Apple to make a rival bid to acquire Time Warner. Currently AT&T is making a play for the TV giant, although the deal could face some serious regulatory roadblocks.
Apple management made it very clear on the company’s most recent earnings call that they are open to making acquisitions, no matter how big the target company is. Of course writers are quick to call attention to this comment and use it to support the rumor about Time Warner.
Goldman Sachs said to be pressing Apple on Time Warner
The New York Post reports that Goldman is “freaking out trying to convince Apple” to make a play for Time Warner, thus creating a bidding war with AT&T for the company. AT&T has already agreed to pay $85 billion for the company. The New York Post cites an unnamed source with knowledge of Goldman’s talks with Apple.
Former Goldman banker Adrian Perica heads up the iPhone maker’s mergers and acquisitions department, so clearly the investment bank is well-connected in terms of being able to push for a deal to be made. Also it sounds like Goldman is a bit miffed at being left out of the talks between AT&T and Time Warner because it was not retained to advise on the deal.
Apple has reportedly expressed interest in acquiring Time Warner previously, and the NYP is applying the acquisition-related comments made by Chief Executive Tim Cook on the last earnings call to Time Warner.
TV-related rumors about Apple persist
Cook has also expressed a specific interest in television for both owning and creating content, and there have been plenty of rumors in this area as well. We’ve been hearing about a supposed over-the-top streaming TV service to be offered by Apple for a long time, although nothing substantial has ever surfaced. The idea is that the company wants to create a service to deliver via the Apple TV to compete with Netflix and even pay-TV providers such as Comcast.
Supposedly the iPhone maker wants to create its own content in a fashion similar to what Netflix has been doing successfully but also sell streaming packages for TV stations. However, the company has reportedly been having trouble settling on prices and other details. It did reveal an underwhelming TV app that’s basically a glorified TV guide last week in hopes that users will use it to access programming, both on-demand and live. However, Netflix and Amazon Prime, two of the most successful on-demand video services, are not supported.
Of course Apple was also said to be having issues with music licensing for its streaming radio service, but eventually the details were ironed out and the service was launched.
Any truth to the Time Warner rumor?
So how likely is it that Apple will actually enter a rival bid for Time Warner? Goldman may certainly be pushing for a deal because it wants in on what would be a fee for a sizeable transaction. After all, the firm isn’t getting a piece of AT&T’s bid for Time Warner, so why not go at it from a different angle. However, this doesn’t mean Apple will even make a bid.
It would certainly be out of character for the company, despite Cook’s comments about them being open to deals no matter how large. The iPhone maker tends to make deals in the millions or hundreds of millions of dollars. It did shell out $3 billion for Beats Electronics a few years ago, but that’s still a far cry from the massive size of a company like Time Warner. The cash and stock deal is worth $84.5 billion, but including debt, the total value of the deal is $108.7 billion.
As a result, I would take this rumor with a grain of salt, and apparently the markets are too. Apple shared edged upward by as much as 0.32% to $114.08, while Time Warner shares rose by about 1% to as high as $88.53 during regular trading hours today.