Apple mulled Time Warner bid to boost media offering
Tech giant Apple explored the idea of buying Time Warner last year, underlining the iPhone maker’s interest in offering its own content.
According to a report in the Financial Times, Apple’s senior vice president of software and services, Eddy Cue, who oversees the iTunes store, Apple Music and iCloud, suggested the idea at a meeting at the end of last year with Olaf Olafsson, Time Warner’s head of corporate strategy.
The report is based on the accounts of three anonymous people who were briefed on the discussions. A tie-up between the pair would have given Apple access to a $60bn (£40.9bn) content empire, that includes HBO, CNN and Time Warner.
Apple is sitting on a cash pile of $216bn and it intends to increase its spending on original content to “several hundred million dollars a year”, the Financial Times said.
However, the bid proposal did not get very far, as the report suggests discussions were only at a “preliminary stage”, and neither Tim Cook, the chief executive, nor his Time Warner counterpart Jeff Bewkes were ever involved in takeover talks. The meeting between Mr Cue and Mr Olafsson was arranged to discuss other commercial matters between the two companies.
The interest in Time Warner comes at a time when Apple is grappling with a slowdown of iPhone sales. In April, the company posted its first drop in revenue in 13 years, putting an end to the incredible growth streak enjoyed by the world’s biggest listed company. Sales for the three-months to March tumbled 13pc to $50.6bn. As Apple comes under pressure to grow in other areas following a fall in iPhone sales, speculation has been rife that it might start a film and television streaming service to rival Amazon and Netflix.
Just two years ago, Time Warner became the target of a bid from Rupert Murdoch’s 21st Century Fox. However, the company scrapped its $80bn bid after Time Warner refused to engage in talks. When Fox made the unsolicited bid for it in 2014, Mr Bewkes argued it undervalued the company.
It is not clear whether Apple’s interest in Time Warner will be revived, but according to Bloomberg Apple is said to be considering a range of potential media targets, including Netflix.
The prospect of Apple’s interest in media and content production propelled shares in Time Warner 1pc higher to $74.07, while chatter that Netflix might also be on Apple’s bid list triggered a 2.6pc jump in the stock to $102.81.