“Recently Margate Capital, a hedge fund run by former Tiger Cub, Samantha Greenberg and John Malone, floated the idea that Apple should acquire Disney,” Open Square Capital writes for Seeking Alpha. “We examined the idea to see if it made sense, and have come away believing that the synergies of a combined company would be transformative for Apple. Using some conservative assumptions, post-acquisition, Apple’s stock should increase from $120/share today to $200/share by end-of 2018.”

“From an investor standpoint, one of the main reasons for why Apple’s stock price trades at a discount to the market is that there’s uncertainty as to whether Apple’s iPhone can sustain its sales and margins going forward,” Open Square Capital writes. “We’ve disagreed with this bear thesis as we think the ecosystem (i.e., software and services) and the hardware sales (i.e., Mac, iPhone, iPads, etc.) are mutually reinforcing and collectively strengthens customer captivity and brand loyalty.”

“Yet, the stock trades at a 13.4x multiple to this year’s estimate and a 14.4x multiple to trailing twelve month earnings (TTM). Compared to the broader market average of 25x, this multiple presumes a stagnant company and undervalues the quality of Apple’s existing business,” Open Square Capital writes. “Thus, we believe a Disney acquisition could be transformative for Apple as it would accomplish three goals: 1. Insure Apple’s cultural impact and brand relevance for the foreseeable future; 2. Increase the breadth and depth of Apple’s business lines; and 3. Increase the value of Apple shares.”

Tons more in the full article – recommendedhere.

MacDailyNews Take: Well, even Eddy would be able to get some ink out of that deal. Can’t sign ’em, buy ’em. At the very least, such a move would instantly make Apple TV and Apple’s “TV” app infinitely more interesting. It’d also be a nice completion of the circle: Disney buys Steve Jobs’ Pixar, then Steve Jobs’ Apple buys Disney (and Pixar).

Laurene Powell Jobs’ fortune jumps a cool $1 billion in a day as Disney soars – February 6, 2015
Disney completes Pixar acquisition; Steve Jobs now Disney’s single largest shareholder – May 5, 2006