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Apple Vs. China In New Bidding War


Apple has China problems.

Morgans gets a deal.

Ruckus is not over yet….

Welcome to the Chinese Imagination issue of M&A Daily


Apple (NASDAQ:AAPL) CEO Tim Cook is heading to China to meet with top government officials. There is much to discuss. iPhone sales are softening. To add insult to injury, Apple just lost a trademark to the iPhone in China. Xintong Tiandi is now free to use its "IPHONE" trademark for leather products.

Apple will battle the case to the Chinese Supreme People's Court at a time when iPhone sales are down by 13% and Chinese sales are down by 26%. The government appears to be cracking down on Apple. They shut down services for iBooks and iTunes last quarter, requiring that any content shown in China gets stored on servers located in the country. Carl Icahn and Icahn Enterprises (NASDAQ:IEP) sold out of the stock explicitly due to concerns with their business in China.

Apple's newest Chinese headache? Tsinghua may be gearing up for a bidding war against Apple for Imagination Technologies. Apple currently owns 8% of the British chip designer and wants to own the rest. Apple (AAPL) has underperformed the S&P 500 (SPY) by over 10% since we last discussed it here: Is Apple Rotting?


Speaking of Icahn Enterprises , they are as net short as they have ever been.

We're much more concerned about the market going down 20% than we are it going up 20%. And so the significant weighting to the short side reflects that.

- IEP CEO Keith Cozza


SBE is buying Morgans Hotel (NASDAQ:MHGC) in a $639 million cash deal. MHGC holders get $2.25 per share in cash. For background on the company, please check out Investing With An Edge: Morgans Hotel published on March 21...