Sources close to the situation say the deal may not be finalized until next week
While Dr. Dre and his friends are probably still celebrating in a studio somewhere, Apple is taking its time to sign the papers and acquire Beats Electronics. The reasons are unknown, but the buyout will most likely go down as planned.Last week, rumors broke out that Apple was interested in buying Beats Electronics, a company co-founded by Dr. Dre and Jimmy Iovine that sells an expensive range of high-quality headphones as well as some other audio gear. More recently, the company launched Beats Music, a streaming service that hopes to rival giants Pandora and Spotify.
Later in the week, people with knowledge of the plans spilled the beans that the acquisition was indeed going to take place for a reported $3.2 billion / €2.3 billion. Without any official confirmation from either party, R&B singer Tyrese Gibson then released a clip showing an ecstatic Dr. Dre bragging about being the first billionaire in Hip Hop, pretty much confirming the rumors.
Now the reliable Re/code cites people who are familiar with the matter as saying that the black suits at Apple and Beats Electronics are yet to shake hands on this deal.
“More time for people to speculate about what it all means: Apple’s planned deal to buy Beats Electronics for $3.2 billion may not be finalized until next week, according to people familiar with the transaction. That’s a longer timetable than some people expected as recently as a few days ago.”
It’s also a slap in the face of analysts like Gene Munster, whose track record is spotted with inaccurate predictions. Munster can chalk up another one, as he and his fellow analysts at Piper Jaffray were among the first to dismiss the rumor, saying, “We are struggling to see the rationale behind this move."
“Beats would of course bring a world class brand in music to Apple, but Apple already has a world class brand and has never acquired a brand for a brand's sake (i.e., there are no non-Apple sub-brands under the company umbrella). Separately, we are not aware of any intellectual property within Beats that would drive the acquisition justification beyond the brand,” added Munster.
In all fairness, Munster wasn’t the only skeptic, and he was careful to phrase his prediction in a way that wouldn’t later come back to bite him in the rear if it turned out to be inaccurate. In fact, there were probably more analysts who didn’t believe the rumors (at the time the news broke out) than there were those who were seeing the rationale behind such a move.