Apple to reportedly announce Beats deal this week at lower $3 billion price
Adding to the never-ending stream of scuttlebutt surrounding Apple's hyped buyout of Beats Electronics, a report on Tuesday claims the terms of the supposed acquisition have dropped to $3 billion and will be announced this week.
Citing unnamed sources close to the ongoing discussions, The New York Post reports the initial $3.2 billion number leaked when Apple was still in the process of quantifying Beats' worth as a company. In the intervening period, the Cupertino, Calif. company has lowered the price to a current $3 billion and will reportedly announce the purchase by the end of this week.
"Apple hadn't even begun its due diligence process when news of the number came out," a source said.
Elaboration on the numbers, the publication said Apple is placing a high value on Beats' high-margin audio hardware business that recorded $1.3 billion in sales in 2013. While some have speculated that Apple's interest lies in rolling Beats Music into its iTunes Radio streaming service, sources say this is not the case.
"Apple doesn't have a streaming music business so it would be a nice instant get, but the hardware is the profitable business," one person said.
In a breakdown of who will walk away with what, the publication estimates Beats co-founders Jimmy Iovine and Dr. Dre will take home hundreds of millions of dollars, while stakeholder Universal Music Group will get more than $400 million on a $3 billion deal.
Ironically, Dre, whose real name is Andre Young, will fall just short of joining the billionaire's club after adding a pre-tax windfall of $750 million from the supposed Beats sale to the $275 million he earned over the past three years. In a video posted to model/actor Tyrese Gibson's Facebook page, Young boasted of being the first billionaire in hip-hop.
Finally, The Post's sources corroborated an earlier rumor that Beats cofounders Jimmy Iovine and Dr. Dre will attend Apple's Worldwide Developers Conference on June 2.
Citing unnamed sources close to the ongoing discussions, The New York Post reports the initial $3.2 billion number leaked when Apple was still in the process of quantifying Beats' worth as a company. In the intervening period, the Cupertino, Calif. company has lowered the price to a current $3 billion and will reportedly announce the purchase by the end of this week.
"Apple hadn't even begun its due diligence process when news of the number came out," a source said.
Elaboration on the numbers, the publication said Apple is placing a high value on Beats' high-margin audio hardware business that recorded $1.3 billion in sales in 2013. While some have speculated that Apple's interest lies in rolling Beats Music into its iTunes Radio streaming service, sources say this is not the case.
"Apple doesn't have a streaming music business so it would be a nice instant get, but the hardware is the profitable business," one person said.
In a breakdown of who will walk away with what, the publication estimates Beats co-founders Jimmy Iovine and Dr. Dre will take home hundreds of millions of dollars, while stakeholder Universal Music Group will get more than $400 million on a $3 billion deal.
Ironically, Dre, whose real name is Andre Young, will fall just short of joining the billionaire's club after adding a pre-tax windfall of $750 million from the supposed Beats sale to the $275 million he earned over the past three years. In a video posted to model/actor Tyrese Gibson's Facebook page, Young boasted of being the first billionaire in hip-hop.
Finally, The Post's sources corroborated an earlier rumor that Beats cofounders Jimmy Iovine and Dr. Dre will attend Apple's Worldwide Developers Conference on June 2.
Comments
[QUOTE]Apple has also apparently just begun doing its “due diligence” on Beats. When the original $3.2 billion number was leaked, the company had not yet done any of that, and since it started, it has apparently dug up some unsettling information.[/QUOTE]
Yay! Go Apple.
Well, I hope one poster in particular will be struck dumb with disbelief.
As an investor, it's nice to see apple paying so little for a company that will add shareholder value immediately through physical earnings.
IF this latest rumor does not see an announcement by the end of THIS week, will ALL of the publications (Financial Times, Bloomberg, New York Times, Wall Street Journal, Forbes, Fortune, Seeking Alpha, Fox Business, CNBC, New York Post, etc.) stop writing about the rumor? :-) No!
IF this latest rumor does not see an announcement by the end of THIS week, will ALL of the publications (Financial Times, Bloomberg, New York Times, Wall Street Journal, Forbes, Fortune, Seeking Alpha, Fox Business, CNBC, New York Post, etc.) stop writing about the rumor? :-) No!
Don't be silly, of course not.
Page views = ad impressions.
That's all mainstream media cares about in 2014. True journalism died in the Nineties.
look forward to seeing if this is true on June 2nd
John Browett all over again?
I was beginning to think the whole thing was just a publicity stunt by Beats.
Well, I suppose that could be true even if Apple does buy them. They're far more likely to be the source of all the leaks than Apple is.
That part of the "story" doesn't strike you as odd? It's hard for me to imagine that any company, much less Apple, would make an offer for a company that they haven't looked into.
Jimmies suit is very nice in that photo though.
I still don't see it happening. Color me surprised if it's confirmed.
There have been plenty of people defending this supposed deal, claiming that it's not about the headphones, it's about the streaming service.
And the article in the OP is saying the exact opposite of that.
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I don't get why these "stories" make it sound like Apple changed course after learning about it from the rumour sites.
At this point we have no reason to believe Apple will make a foolish acquisition decision, and we should assume that if they are going to make such a large purchase that will put in the time to make sure it's worth the price.
Apple doesn't rush things.
Love the alliteration!
Are thar rumours realistic or really reaching? Beats me.