If Twitter Were An M&A Target, Who Would Want It?

The constant barrage of Twitter Inc (NYSE: TWTR) rumors involving M&A activity is unlikely to show any signs of stopping. Although Robert "Bob" Peck of SunTrust Robinson Humphrey doesn't believe Twitter is likely to sell itself in 2016, this isn't stopping him from taking a deeper look into some of the companies that may be interested in acquiring Twitter if the company were to put itself up for sale.

For starters, Peck noted Twitter's stock is trading at a "large price" at 15x EBITDA with a roughly $15 billion market cap. As such, a 20 percent premium would put a price tag on any acquisition at around $18 billion. This does limit the total number of potential buyers, but here is a brief pro and con summary of mega-cap technology names that could in theory absorb Twitter.

Alphabet

• Pro: Alphabet Inc (NASDAQ: GOOG) (NASDAQ: GOOGL) could realize cost and revenue synergies by implementing Twitter's real-time feed in its search.
• Con: Alphabet would face anti-trust and FTC concerns and an acquisition may go against the company's new financial discipline.

Related Link: Twitter's Time May Be Running Out

Facebook

• Pro: Facebook Inc (NASDAQ: FB) could see a strategic fit in an acquisition since it has been unable to leverage real-time content.
• Con: Facebook already has multiple platforms with more than one billion users.

Apple

• Pro: Apple Inc. (NASDAQ: AAPL) could diversify its business outside of hardware and create a social presence.
• Con: Apple has less experience in ads and social.

Amazon

• Pro: Amazon.com, Inc. (NASDAQ: AMZN) could move into the live content and media relations space while extending its advertising ambitions.
• Con: Amazon has other priorities and an acquisition of Twitter doesn't fit in its strategic view.

Microsoft

• Pro: Microsoft Corporation (NASDAQ: MSFT) has shown an interest in online and social.
• Con: Enterprise and cloud appear to be a bigger focus for the time being.

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