Buying Disney could give Apple the magic it needs, says analyst

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Walt Disney's Mickey Mouse, Circa 1930
Apple's next big purchase?
Photo: Walt Disney

RBC Capital analyst Amit Daryanani has a suggestion for how Apple could spend its cash stockpile, while also growing its presence in media: buy the Walt Disney Company.

“There are plenty of factors to consider,” Daryanani wrote in a note to investors, “but such a deal would create a tech/media juggernaut like no other and instantly scale AAPL’s services, content, and media portfolio, which would make the case for a higher valuation.”

According to Daryanani, Apple should be able to scoop up Disney for $157 a share, which would make it a $237 billion deal. With the two companies combined, including Apple’s $750 million market cap, the analyst points out that this would push Apple over the trillion dollar valuation mark.

He also notes that it would add about about $61 billion in revenue to Apple’s roughly $234 billion in annual revenue.

“The resultant company would be massive, with enough cash and balance sheet capacity to change the nature of the hardware, service, and content industries,” he writes. “If there’s a deal out there that would strike fear in the hearts of Silicon Valley and Hollywood, this could be it.”

Better than 0% chance

This is far from the first time someone has suggested a similar deal. I’ve heard some variation on this dating back to Pixar’s sale to Disney, which made then-Apple CEO Steve Jobs Disney’s single largest shareholder. (His family have since downgraded their share in Disney.)

Because of the additional properties Disney owns, Apple would also acquire Lucasfilm (which owns Star Wars) as part of the deal, Marvel Studios, ABC television, A&E Networks, Pixar, Disney’s theme parks, and more.

It’s certainly a fun idea to bounce around, and Disney and Apple does make a certain amount of sense, given their name brand recognition, reputation for quality products, and more. With that said, aside from giving Apple the shot in the arm it wants as a media company, would the acquisition really fundamentally benefit either company?

Still, Daryanani covers his bases. His bet as to whether this will happen or not? A better than 0 percent chance, apparently. There’s nothing like confidence in predictions!

Source: Barrons