Matt Yglesias has an interesting idea. Why can't
The problem here is that in inflation-adjusted terms the largest leveraged buyout in history was KKR's $55.38 billion aquisition of RJR Nabisco back in 1989 (that was $31.1 billion 1989 dollars). Could Apple tap its ~$140 billion in cash reserves to cut down on its borrowing needs and make the scenario more realistic? It sure could. But the problem is that a $512 billion loan isn't really any more realistic than a $567.38 billion loan. It's just way too much money. They say some banks are too big to fail, but Apple is too big to buy.
I wouldn't say I am wholly and entirely convinced by that argument. I think it's maybe vaguely possible that such a deal could be put together. It's not as if the financial markets are suffering from a lack of liquidity at present after all.
However, there is a slightly different problem. Apple may indeed have $140 billion in cash but that doesn't mean that it has that much cash available to use to buy itself. And no, I'm not talking about the need to keep some working capital and so on. Rather, a goodly chunk of that cash is sitting offshore. And it cannot be used to do anything in the US: because if it is then it has to pay the US corporate income tax. This wouldn't be quite 35% as some foreign tax will have been paid on that cash. But Apple's famously aggressive in managing its tax exposure and it would surprise if the US bill would be less than 30% of what was brought onshore. And using the cash to buy stock listed in New York would certainly be regarded as bringing that cash onshore.
The same would also be true of any US bidder as well. Which leads to an odd if interesting conclusion. Imagine that a bid were organised. Go on, just imagine. It would be offshore bidders who could afford to pay more for Apple. For they would be able to use those no tax paid as yet deposits to fund the bid. Just as they would be able to use the future profit streams from non-US sales without having to pay US corporate income tax on them. For to make use of them they don't need to bring them onshore into the US. Thus the income flows from Apple would be worth more to a non-US bidder and so they could afford to offer a higher price for the company.
Sadly this is all entirely theoretical of course. For there is no way at all that politics would allow an iconic company like Apple to be sold to foreigners.
