Dr. Dre's "Billionaire" Comments Could Complicate Apple's Purchase of Beats Electronics

Exclusive: HipHopDX spoke with Mergers & Acquisitions expert, Corey Davis about whether Dr. Dre broke confidentiality agreements between Beats Electronics and Apple by alluding to being "the first billionaire in Hip Hop."

Dr. Dre was seen in a video released by Tyrese stating that he is “the first billionaire in Hip Hop” last night (May 8) during what appears to be a celebration of Apple’s rumored acquisition of Beats Electronics. While the Financial Times reported that Apple would acquire the company for $3.2 billion, neither electronics powerhouse has confirmed the transaction. Since the deal has yet to be announced officially, does Dr. Dre’s statement potentially jeopardize confidentiality agreements tied to the multibillion-dollar deal?

To shed light on whether Dr. Dre’s comment broke standard confidentiality agreements, HipHopDX asked White, Weld & Co Securities Managing Director, Corey Davis for his expert opinion.

Mr. Davis says that, “While there is a large amount of speculation in the media about a potential deal with Apple and Beats Electronics, there has yet to be any direct confirmation from the parties involved. I reviewed the video of Tyrese and Dr. Dre talking about the ‘first hip hop billionaire’ and changing the Forbes list. A viewer could infer from the media speculation that Dre is referring to his newly found wealth as a result of the rumored deal.

“The answer to your question regarding whether or not this 'statement' breaks any confidentiality clauses falls into a 'grey' area,” Davis says. He continues:

“There are ethics, there are morals and then there is the law. While I am not a lawyer, one could argue that he didn’t break any laws because (i) even without a deal, the company now has an implied value of $3.2 billion (or more); and (ii) neither Dre or Tyrese mention Apple. I am sure their lawyers aren’t pleased about the video given that it has been removed from Tyrese’s Facebook page.

“Finally, as a privately held company, any leaks of a deal will not cause the deal price to go up—with the exception that it might entice new bidders to come to the fore. However, if the bankers did their job, you would expect all of the likely buyers to have already been contacted. In fact, their lapse in judgment could have an unintended consequence that could cause the deal to collapse. If investors think a deal between Apple and Beats Electronics doesn’t make sense, they could sell Apple stock causing the share price to decline—sending a strong message to Apple management that they don’t approve. If the deal hasn’t been inked, it could cause management to rethink their decision.” 

Mr. Davis is a respected executive and strategic advisor with over 18 years of experience. Throughout his career, Mr. Davis has advised on over $14 billion of M&A and capital raising transactions for his clients. Prior to joining White, Weld & Co. Mr. Davis founded Barrington Capital Advisors, LLC, a research and advisory practice where he advised financial institutions, hedge funds and other small to medium sized businesses. Previously, he was a Vice President of both Business Development and Institutional Sales at The Receivables Exchange, a Bain Capital Ventures backed company. Prior to that, he was an investment banker in the Financial Institutions practice at Banc of America Securities, Credit Suisse First Boston (through its acquisition of Donaldson, Lufkin & Jenrette) and J.P. Morgan Securities.

View the video of Tyrese and Dr. Dre presumably celebrating the rumored transaction between Apple and Beats Electronics below.

RELATED: 3 Top Secret Weapons Apple Gets Buying Beats By Dre Listed By TheStreet

117 Comments

  • farmer

    Ah, yeah. Here's how it works. If I'm negotiating with you to buy something and part of my off is that you keep your mouth shut or the deal is off, and you can't keep your mouth shut, guess what? Oh, and I don't put into the agreement that I have to keep my mouths shut, that's why I need you to do so. Get it?

  • captain jack

    i knew that was a mistake as soon as i saw the video. it seemed very uncharacteristic of dre. he is usually very covert about such things.

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  • old weezy

    fuck hova nigga you better pop urself roll the dice against me u better slot urself i done overtook the roc myself send my bloods at u cant get the docs for help il still kidnapp ur wifey and daughrt bitch i built cash money from the bricks of my mortar im finna take all you pricks to the slaughter and i aint droppin a verse for less than a qauter

  • markel

    http://www.youtube.com/watch?v=TCrKzQCeUDc the new rapper from england

  • Anonymous

    dumbass Tyrese. smh

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  • anonymous

    WHY DIDNT EMINEM MAKE SLIM SHADY LP 2 BEFORE DOING MMLP2? BECAUSE IT WAS JUST A CASH GRAB!!!! HE WENT WITH THE MOST POPULAR BRAND!!!! OPEN YOUR EYEXZ!!! OPEN YOUR EYEXZ!!! OPEN YOUR EYEXZ!!!

  • Anonymous

    Well if "Financial Times reported that Apple would acquire the company for $3.2 billion", why are we talking about Dre? Which came first?

  • Anonymous

    Dre is a very rich man with a billion dollars.

  • Anonymous

    Tyrese is such a groupie.

  • What i think

    You have to listen.

  • ANDY

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  • Anonymous

    that IROC is a lil bitch ... faggot i kill u nigga haha

  • Anonymous

    fuck that black ass nigga iroc fuck you niggga ..

  • Anonymous

    i'm hating ooon dre.. niggaaaa

  • Anonymous

    dre is such a bitch

  • IROC

    Dre was never getting a billion nothing the over priced head phones wasnt moving like they wanted anyway no Ceo at apple was looking at some grainy video of Dre and tyrese anyway now they looking over them inflated numbers of sales that owners of the head phones gave apple as they say the jig is up, dre was being paid for his name attached to the product and would have gotton a percentage and trust it wasnt near the dollar amount he was spitting

    • Royal

      Dre is more than just name and face. Do the research. Him and Jimmy Iovine started it together in '07 and own 75% of the companies stake. The other 25% was owned by HTC till The Carlylr Group took over HTC's share as the minority investor.

  • Anonymous

    Blame Tyrese's dickriding ass for that

  • Cedric Muhammad

    Lol @ HHDX asking a second class financial services firm for their opinion

  • Vla3d

    You IDIOTS - if you don't remove that video, Dre's never gonna get paid!

    • Johnny Blayze

      Of course he'll get paid. This deal will get done with this video out. You have no clue about merger and accusations until your read this article... Stay in the corner quietly please and use the time to educate yourself about business, law and economics.

  • kennyken

    congrats, but I wonder what does this mean for him as an artist.

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  • Anonymous

    Jimmy probably is somewhere shaking his head.

  • Heartbreak Drake

    eminem is the most overrated piece of shit alive

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  • Anonymous

    First homosexual with a billi

  • Anonymous

    This will actually take Dr dre to 800k after capital gains tax. Check Forbes or try do the math for yourself.. Anyway much success to Dr Dre he does deserve it , he worked hard out and is a hip hop pioneer... He deserves it way more than gay z of poof daddy.

  • moresickaMC

    I know a lot of racists and hiphop haters dont want to see this deal go through. but it will

  • Anonymous are Whites

    Those hoping this deal fails are haters. This is going through. And as far as Dre and Tyrese boasting about a billi... To quote Jay Electronica- The devil, the haters, the bloggers, the papers, the labels, they labeled me But they can't relate to our struggle, my ni$&A, we came up from slavery.. Bompton to Billions if one does it we all can do it. Let the penny counters argue about after taxes stuff. The point is the word billionaire is associated with a person I can relate to.

  • The_Observer

    Black peeps acting like monkeys...you did not hear overnight billionaires like Mark Zuckerberg, WhatsUp owners, and many others act like this...

  • Anonymous

    Tyrese u dumb muthaphuka

  • Frost

    Dre is and will always be a dumb ass compton nigga. Can't belive nigga is this dumb, LMAO

  • t

    Dre is high if he thinks this deal would be a billionaire. What an idiot. Dude maybe has 10% at the most

    • ZOD

      Dre and Iovine formed the company together...and together they own 75% of the company...split that and its like 37.5% over a billi before taxes plus whatever else hes worth

    • Chosen

      10% fool you crazy! Him and Jimmy make a billion off this deal. He just made $250 million for himself by the end of last year off his percentage he sold than later got it back now this. POWER MOVES so stop hating!

  • Anonymous

    Apple won't go through with it. Beats are the biggest wanksta hipster headphones ever... I want Dre to be a billionaire but I have my doubts

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  • Anonymous

    Are we sure Dre didn't have a ghostwriter write what he said on this video?

  • Anonymous

    Thank em for keeping your career alive in the first place.

    • Anonymous

      dres has signed like 40 niggas over the years who never got a release date who got their albums shelved

    • Anonymous

      Are you all that stupid? Yeah Dre wouldn't be where is is now without signing em, 50 etc, but he wouldn't be done for good. And em, 50 etc probably wouldn't be where they were now if it wasn't for Dre, do you think Dre signed them because he liked them? Maybe he did like them, but the reason he signed them was for business, and they're only going to be good for his business if they became successful. Dre singed dudes so they would be successful which would be good for business, the dudes he signed became successful and had a career that they might never have had without the help, this success keeps Dre relevant and keeps him payed. They help each other, but dre doesn't have to be thankful for the other guys, there would've been other people to sign.

    • Anonymous

      they kept him relevant for another 15 years

    • Anonymous

      Eminem and 50 Cent would have no career without Dre. He made those two.

    • Anonymous

      Dre would have no career without Em and 50 etc... he would have been done in 2000

    • Anonymous

      "there would be no BEATS without EM" GTFOHWTBS there would be no "EM" without DRE

    • Anonymous

      there would be no BEATS without EM

    • Alonzo

      Wow, you must be angry and white. There would be NO Eminem without Dre. Seems you've forgotten about Dre. Westcoast.

  • Anonymous

    OOOH SHUT THE F-UP HHDX. JEALOUS STUPID MUTHERF%&*%$$

  • Anonymous

    so they gonna blame dre for not being quiet when the news was posted by media before that video we got the inmates running the asylum out here, smmfgdh

  • SMOKE J

    No where in the video did he say "WHY" he was about to be a billionaire so I don't see the problem.

  • Tyresehater

    That's what you get for actin ignorant and immature.

  • georgel

    It was stupid and not very classy of dre and tyrese though. As soon as i saw it i thought to myself is this dumb ass really doing this before everything is signed and done. I would have kept my mouth shut until it was announced officially. Also with the jealousy in this world from people who are middle class and poor it wasnt that classy of him to make a video bragging about his money. But whatever, now he can get a pure platinum car and house and blow his money like a welfare check recepient.

    • Anonymous

      you wouldn't have done sh*t because your crab ass mentality would never have you in that position ya nose up in the air pussy

  • jagoora

    don't make a difference to me. the deal will still happen.

  • Anonymous

    Lord Jamar has something to say about this ...

  • Marquis

    What is this amatuer hour? This is why you dont give blackies money. Grow up dre you are like 60 years old fool.

  • Anonymous

    its a big deal but bragging about shit is not a good look

  • Anonymous

    them rich white folks will be looking at this vid like damn why we giving these gang bangers so much money lool

  • Anonymous

    u really think dre gettin all that 3.2 billion come on lol

    • G

      He's getting 1.2 billion of the 3.2, and already has a net worth of over 500 million...so yeah. He will be a billionaire.

  • HIPHOP

    this is not hip hop news

  • Anonymous

    THEY SHOULDA NEVER GAVE YOU NIGGAS MONEY!!!! .....HA!!!! JIMMY READY TO CRACK THE WHIP ON DR. KUNTA IF HE FUCKS UP THIS DEAL!!!! SILLY NEGRO!!!! DON'T HATE ON MY OPINION!!!!

  • NinjaB

    first they didn't say a "rumor came out two weeks ago", they said the Forbes list just came out two weeks ago... no mention of Apple, or Dre selling anything.. I highly doubt they broke any CA's... still, it was dumb to post lol congrats to Dre if/WHEN it goes through.

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  • DR DRE

    Justin Hunt, your momma's vaginal complications which led to major concussions in your head during birth affected your ability to comprehend. I am a millionaire!!!!!!

  • OUCH!

    Experts that dont know sh!t about the situation internally. everything is an assumption at this point. i need to work for these people as well. i can make up stories as well...

  • Anonymous

    "While I am not a lawyer -" Article over.

  • CS

    Come on Dre ... you just made history Brother. Be kool.

  • spirit equality

    This story is speculation built on hearsay; dude in this article isn't even a lawyer, speculating on a hypothetical clause in an agreement he hasn't seen. FOH.

  • Anonymous

    Dre is a winner for 2014, he been eating off Em's album and he fired 50 Cent, became a millionaire and has Kendrick in the chamber.

  • Anonymous

    LOL niggas lost. couldnt keep your fucking mouth shut for a few more days LOL good job Tyrese!

  • DrebinSlevin

    Makes no sense. If Dr.Dre's comments breaks confidentiality, then so do the sources who reported on this story in the first place.

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