Disney Mulled Twitter Buy, Bought BAMTech Instead – TheTradersWire

Disney Mulled Twitter Buy, Bought BAMTech Instead

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Disney Mulled Twitter Buy, Bought BAMTech Instead

By Donna Fuscaldo | October 4, 2017 — 10:24 AM EDT

Walt Disney Co. (DIS) Chief Executive Bob Iger confirmed rumors swirling last year that it considered buying Twitter Inc. (TWTR) the embattled microblogging website operator.

Speaking during Vanity Fair’s New Establishment Summit this week, Iger said the company mulled an acquisition when it was exploring ways to provide and sell content directly to consumers. It opted instead to acquire a majority stake in BAMTech, the sports streaming service it already had an investment in.

“We thought Twitter had global reach, a pretty interesting user interface, and a compelling way that we might be able to present and sell the content our company makes to the consumer,” said Iger at the summit, according to CNBC. “But we decided, ultimately, not to go in that direction. And we ended up—took us months to do it—buying a platform called BAMTech.” The executive noted that the social media aspect of Twitter is “interesting,” but the company was focused on distribution. Disney will use BAMTech as the backing for its streaming services. (See more: Why Disney Stock Looks Cheap Given Growth Outlook.)

Chatter Over Twitter Deal

Last fall, Bloomberg, citing people familiar with the matter, reported Disney was interested in buying the social media company. That sparked all sorts of speculation as to what a combined company could look like. It also prompted some Wall Street watchers to express optimism for a deal. BTIG Research laid out in May a five-point plan to reposition the entertainment giant that included buying Twitter. According to analyst Richard Greenfield, management at the company should be using its strong balance sheet and free cash flow to “strategically reposition” it for future growth. In order to do that, he said he thought the company should stop repurchasing shares and instead use the money for acquisitions. He said at the time that Twitter would be an ideal way to reinvigorate ESPN. (See also: Disney Should Buy Twitter or Spotify: BTIG.)

While Disney chose BAMTech over Twitter that doesn’t mean the entertainment juggernaut isn’t done on the M&A front. In September, during a Bank of America media and communications conference, Iger told investors and analysts that its recent M&A activity will continue as the company aims to enhance its digital presence and take on the competition. Those comments sparked speculation with some investors betting one of the targets will be Snap Inc. (SNAP), the maker of the disappearing-message app Snapchat. That may not be too much of stretch since Disney’s newfound competitors—Alphabet Inc.’s (GOOG) Google and Facebook Inc. (FB)—expressed interest in acquiring the social media company. Google reportedly bid at least $30 billion in 2016. The offer, which was rejected by Snap, remained on the table after it went public. It’s not clear if Google is still interested in acquiring. Facebook also made an offer for Snap a few years ago, and that, too, was rejected.

 

Published at Wed, 04 Oct 2017 14:24:00 +0000

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