Apple is likely 'aggressively involved' in Peloton bidding war, Wedbush’s Dan Ives says

Published Mon, Feb 7 20226:08 AM EST

Key Points

On Friday, The Wall Street Journal reported that Amazon is among a number of companies that are interested in buying the stationary bike maker. A few hours later, The Financial Times reported that Nike is also evaluating a bid.
But in a note to clients on Sunday, Wedbush said it would "make strategic sense" for Apple to acquire Peloton.
"With media reports swirling that Peloton could be up for sale with Amazon and Nike potential suitors, we would be shocked if Apple is not aggressively involved in this potential deal process," wrote Wedbush analyst Dan Ives.

Apple is likely to be among the companies looking to make a bid for fitness start-up Peloton , according to Wedbush's Dan Ives. On Friday, The Wall Street Journal reported that Amazon is among a number of companies interested in buying the stationary bike maker. A few hours later, The Financial Times reported that Nike is also evaluating a bid. But in a note to clients on Sunday, Wedbush Analyst Dan Ives said it would "make strategic sense" for Apple to acquire Peloton. "With media reports swirling that Peloton could be up for sale with Amazon and Nike potential suitors, we would be shocked if Apple is not aggressively involved in this potential deal process," wrote Ives. "We believe Peloton is a unique asset that would fit well into Apple's golden consumer ecosystem which makes us believe Cupertino could be a real bidder for this asset." Apple and Peloton did not immediately respond to a CNBC request for comment. Peloton's market cap is around $8 billion but any acquisition would likely be for between $12 billion and $15 billion, Ives said, adding that it would be "easy for Apple to digest" given its $200 billion treasure chest. Peloton's stock has fallen 80% from its pandemic highs amid concerns around the company's growth and demand for its products. Activist investors have recently been pushing for a sale of the connected fitness equipment maker. "We believe there will be a handful of technology and consumer brand stalwarts circling for a potential bid," Ives wrote, saying that Disney may also be looking to bid for Peloton. Peloton would be a "major strategic coup" for Apple, according to Ives, who thinks it would "catalyze the company's aggressive health and fitness initiatives over the coming years." Acquiring Peloton, which has around 3 million paid subscribers, would be both an offensive and a defensive move for Apple, according to Ives. "On the defensive front, if Peloton was acquired by Amazon or Nike this would propel the winning bidder on the health and fitness front as well as gain a major foothold into the living rooms of consumers globally," Ives wrote, adding that they could cross-sell other consumer services into the Peloton ecosystem. "Within the walls of [Apple HQ in] Cupertino the prospects of another stalwart getting their hands on Peloton would be a business model risk for its healthcare segment and future endeavors," he added. On the offensive front, Ives believes that a Peloton acquisition would help Apple "bulk up its healthcare initiatives," which are underpinned by the Fitness+ subscription service and the Apple Watch. With the exception of the $3.2 billion acquisition of Beats in 2014, Apple hasn't made many large acquisitions recently but Ives believes Peloton could be a "unique asset" for the iPhone maker in a crowded landscape.

NEW YORK, NEW YORK - SEPTEMBER 20: Apple CEO Tim Cook greets customers at the grand reopening of Apple's flagship Apple Fifth Avenue retail store on September 20, 2019 in New York City.

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Apple is likely to be among the companies looking to make a bid for fitness start-up Peloton, according to Wedbush's Dan Ives.