Apple recently approached Time Warner about takeover bid, now “monitoring” AT&T talks

AT&T Chicago store (interior 001)

AT&T, the second-largest carrier in the United States, is in advanced talks with media giant Time Warner about a possible merger and Apple “is now monitoring the situation”, people familiar with the matter told the Wall Street Journal. The Cupertino-based gadget maker was first mentioned as a possible suitor for a Time Warner takeover back in January of this year.

According to WSJ, Apple a few months ago approached Time Warner “about pursuing a combination”, but the discussions didn’t progress “beyond a preliminary stage.”

Time Warner shares were up seven percent in afternoon trading.

WSJ writes:

From Apple’s end, executives under Chief Executive Tim Cook were involved in the earlier talks. Apple has pursued plans to build an online TV service and has begun creating original programming of its own.

Before its most recent approach, Eddy Cue, Apple’s Senior Vice President of Internet Software and Services, brought up a potential combination in a meeting with Time Warner’s head of corporate strategy Olaf Olafsson last year, the people said, though the talks never went further than that.

Time Warner owns premium content brands like HBO, CNN and Warner Bros.

The media giant doesn’t have a controlling shareholder. It reported $28 billion in 2015 revenue and had a market capitalization of $68 billion before WSJ reported on the deal.

“The media giant’s advanced talks with the telecom company could set off a deal frenzy,” speculates the article, adding that a deal between AT&T and Time Warner could come together within days.

Still, a host of other contenders could jump into the fray for Time Warner and scuttle the planned deal, media executives and analysts said. Google, however, doesn’t appear interested in making a Time Warner offer, a person familiar with the situation said.

21st Century Fox and Walt Disney Co. are also unlikely to join the fray.

“There has been along list of companies speculated to be interested in acquiring Time Warner, starting with the almighty Apple. So if AT&T wants this deal, it is in their best interest to move as fast as possible,” said Todd Juenger of Bernstein Research.

Good! Let them buy Time Warner, I say.

We all know too well that those kinds of mega mergers between huge companies with corporate cultures that are polar opposites to one another collapse sooner than later.

I don’t want Apple to buy a huge media company. I want them to focus on making great products, software and services and partner with media companies, not become one.

Source: The Wall Street Journal