Apple growing cash stash spurs talk of huge acquisition
SAN FRANCISCO >> As Apple’s stash of cash grows, so does the possibility that the world’s most valuable company will use some of the money for a huge acquisition that would expand its empire beyond iPhones and other gadgets.
The company currently holds more than a quarter-trillion dollars it could use to go shopping. So far, the guessing game has primarily focused on possible targets such as Netflix and Tesla Motors.
Either deal could make sense, given Apple’s long-running interest in providing a TV service to consumers and its more recent work on selfdriving cars .
But in recent months the takeover talk has swirled around whether Apple might do something even more dramatic by making a bid for Walt Disney Co.
THE MOUSE AND THE APPLE
Such a combination would create the world’s first company worth $1 trillion. Beyond that, an Apple-Disney marriage would unite some of the world’s most successful brands in technology and entertainment — a list that includes the iPhone, iPad, Mac computer, Mickey Mouse, Disneyland, ESPN, Lucasfilm, Pixar and Marvel.
“If there’s a deal out there that would strike fear in the hearts of Silicon Valley and Hollywood, this could be it,” RBC Capital Markets analyst Amit Daryanani wrote in a recent research report assessing the logic of an Apple-Disney combination.
Apple doesn’t discuss specific companies that it might buy, but it’s exploring far and wide, according to Chief Financial Officer Luca Maestri. “We are looking at every size of acquisition, so we will see how it goes going forward,” Maestri told The Associated Tuesday interview.
Disney hasn’t given any inclination that it’s looking for a buyer, but publicly held companies are required to consider all takeover offers. Buying Disney would be expensive. Daryanani estimates that Apple would have to pay $157 per share, or about $250 billion. Press
TREASURE CHEST
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Apple is one of the few companies — if not the only one — that could pay that sum out of its pocket. The Cupertino, California, company ended March with nearly $257 billion in cash and marketable securities, according to numbers released Tuesday with Apple’s earnings report for the January-March quarter.
That’s up from $233 billion a year ago, and the figure is expected to keep growing as Apple piles up more profits from the iPhone, iPad and Mac, as well as the applications and services that feed those devices. In its latest quarter, Apple’s earnings climbed 5 percent to $11 billion while revenue also rose 5 percent to nearly $53 billion.
In recent years, Apple has used a large chunk of its cash to provide its shareholders with extra income. The company disclosed plans on Tuesday to raise its quarterly dividend by more than 10 percent to 63 cents per share, marking the fifth increase in five years. Apple also has spent $151 billion buying back its own stock since 2012.