Is Apple set to use £185bn cash pile to buy Netflix?

APPLE could use US tax reforms to swoop on video streaming firm Netflix.

A tax amnesty could allow the American tech giant to repatriate its £185bn foreign cash pile, giving it a huge war chest to bankroll takeovers, say Citi analysts. They predicted its most likely target would be Netflix, which has a market capitalisation of £64bn.

In a research note, Citi’s Jim Suva and Asiya Merchant added: ‘Apple has too much cash – nearly $250bn – growing at $50bn a year.

‘This is a good problem to have. Historically, Apple has avoided repatriating cash to the US to avoid high taxation.

‘As such, tax reform may allow Apple to put this cash to use. A one-time repatriation tax would give Apple $220bn (£161bn) for M&A or buybacks.’

The reforms pushed through by the US Congress and President Donald Trump would allow Apple to bring back its cash without suffering a big hit. So far it has avoided doing this because of the taxes it would by Matt Oliver have to pay but under the changes, it would now just have to pay a charge of about £29bn.

The rest would be available for it to use as it wished, with Barclays predicting Apple making ‘significant capital returns’ and ramping up its acquisitions.

A move to snap up Netflix was given a probability of 40pc by Citi, ahead of other potential candidates including Elon Musk’s Tesla, Electronic Arts, Activision and Disney.

Apple is expanding its presence in TV and film, buying space at Hollywood studios and hiring top producers.

It is set to spend £736m on original content per year. But its early efforts largely flopped. Its celebrity panel show, Planet of the Apps, was described by Variety as ‘essentially bland’.

After hiring Jamie Erlicht and Zack Van Amburg – who oversaw production of Vince Gilligan’s hit drama Breaking Bad – it is now hoping to make a bigger impact. Netflix and Apple declined to comment.