Will Time Warner (TWX) Make An Acquisition Soon?
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Walt Disney's (NYSE: DIS) purchase of Marvel Entertainment (NYSE: MVL) could pressure Time Warner's (NYSE: TWX) CEO Jeffrey Bewkes to make an acquisition, according to BusinessWeek.
Time Warner has about $7 billion in cash, and BusinessWeek thinks it should use that cash to expand its distribution reach. But, analysts think Jeffrey Bewkes may be afraid to make a large purchase after taking plenty of heat for buying profitless social network Bebo. Bewkes denies the Disney acquisition pushes him into making his own deal, instead he said that Disney bought Marvel in part to better compete with Time Warner's own DC Comics unit. "Nothing changes," he says. "We still look at any potential acquisition for its strategic rationale, what the risk is in terms of what we are willing to pay, and what our financial return will be."
BusinessWeek thinks there are plenty of strategic targets that Time Warner could pick up. The magazine thinks DreamWorks Animation SKG (NYSE: DWA) would allow it to better compete with Disney's (NYSE: DIS) Pixar. A DreamWorks buyer could start making Shrek sequels as soon as 2011. One media exec told BusinessWeek that DWA may be too pricey. "Time Warner looks to be a bottom fisher," says this person. "I don't know if Jeff Bewkes has the support of his board to buy something that will take a large premium to get."
Bewkes could also pick up cable channels. The magazine mentions Scripps Network Interactive (NYSE: SNI), whose lineup includes the Food Network and HGTV. It also mentions that Time Warner could look to buy parts of NBC Universal (NYSE: GE).
Time Warner could also buy game companies like Electronic Arts (Nasdaq: ERTS) or Take Two Interactive (Nasdaq: TTWO), with its Grand Theft Auto franchise. Buying a game company, would allow Time Warner to diversify away from movies and ad-supported media.
BusinessWeek thinks with consolidation brewing, Bewkes may soon acquire one of the above entities.
Time Warner has about $7 billion in cash, and BusinessWeek thinks it should use that cash to expand its distribution reach. But, analysts think Jeffrey Bewkes may be afraid to make a large purchase after taking plenty of heat for buying profitless social network Bebo. Bewkes denies the Disney acquisition pushes him into making his own deal, instead he said that Disney bought Marvel in part to better compete with Time Warner's own DC Comics unit. "Nothing changes," he says. "We still look at any potential acquisition for its strategic rationale, what the risk is in terms of what we are willing to pay, and what our financial return will be."
BusinessWeek thinks there are plenty of strategic targets that Time Warner could pick up. The magazine thinks DreamWorks Animation SKG (NYSE: DWA) would allow it to better compete with Disney's (NYSE: DIS) Pixar. A DreamWorks buyer could start making Shrek sequels as soon as 2011. One media exec told BusinessWeek that DWA may be too pricey. "Time Warner looks to be a bottom fisher," says this person. "I don't know if Jeff Bewkes has the support of his board to buy something that will take a large premium to get."
Bewkes could also pick up cable channels. The magazine mentions Scripps Network Interactive (NYSE: SNI), whose lineup includes the Food Network and HGTV. It also mentions that Time Warner could look to buy parts of NBC Universal (NYSE: GE).
Time Warner could also buy game companies like Electronic Arts (Nasdaq: ERTS) or Take Two Interactive (Nasdaq: TTWO), with its Grand Theft Auto franchise. Buying a game company, would allow Time Warner to diversify away from movies and ad-supported media.
BusinessWeek thinks with consolidation brewing, Bewkes may soon acquire one of the above entities.
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