Burns Interview With CNBC Clearly Opens The Buyout Door To Intel, Google, AMZN APPL, TWC, etc
Here's part of the CNBC interview, thanks to wanna's post. I did some minor English editing of the stenographer. I inserted my thoughts within parentheses after Burns' s last response.
CNBC moderator: I want to get to one rumor in the marketplace, and that is lionsgate as a takeout target. The media stocks have all been on tremendous runs, your stock, no different, recently hitting an all-time high. Two billion dollars. A lot of people saying that's a nice, tasty, sort of sizable but small enough acquisition to actually do by a major media studio. is it possible?
Burns: It is possible, I think it's possible. I will tell you that if you look at some of the market caps, you look at china mobile, for example, has a bigger market cap than News corp., Disney, Viacom and Time Warner together. Take a look at the market cap of some of these companies here, look at Amazon's market cap of $125 billion. Google at, what, $280 billion.
CNBC moderator: Where are you bringing me, Michael, on all these market caps?
Burns: What I'm saying is that the world has changed dramatically. So, if you're asking me specifically, is lionsgate a takeover candidate, that's ultimately something that our board of directors would have to approve and also that would be something that our shareholders would have to approve.
CNBC moderator: Are you saying we have to look outside media? You have to look towards maybe even a bigger company out there, think outside the box, in other words?
Burns: Here's what I think, melissa. If you take a look at tablets and smartphones that have been sold, that are working out there right now, active tablets and smartphones, there are 2 billion of those out there in the marketplace, or approaching that. A billion of those have been sold in the last year. So,I think all those, whether smartphones or tablets, all of them have the same need, which is, what are they going to put upon them. (Burns is saying that there are loads of companies that NEED LGF)
1- Burns said there are 2 billion (Tablets & Smart Phones) of those out there in the marketplace, or approaching that. A billion of those have been sold in the last year
2- So if LGF's content is used on those devices, what is LGF worth per device? $4 or $8 or $16 with translates into $4 times two-billion devices or $8 billion takeover or $16 Billion takeover and so on (read: He certainly appeared to reject the CNBC moderator's thinking of some relatively small amount.)
3- Recently Wanna made an estimate of $64 buyout price based on the Disney buyout of LucasFilms. That might be low, according to my recall of Wanna's postion, which I agree with her based on Tablets, Smart Phones and the coming Internet TV.
4- The bottom line, according to my view of what Burns stated and because he continued to elaborate, is Wanna's analysis is right on. The upside bound is pretty high. Less
What Burns is saying to the CNBC moderator is that not only media companies could acquire LGF, but also those companies who are making devices that OUTPUT CONTENT. And we know that those companies such as AAPL, INTC, AMZN, Samsung, emerging Chinese device makers, etc., are in a Darwinian Struggle to survive. My goodness, the upper bound of a bidding war for LGF can be $60 or much higher.