If Carl Icahn is going to push Apple to buy one of his holdings, it has to be Nuance (NUAN). Here’s why:

Icahn owns 19.2% of Nuance, or $1.14 billion worth, and his son Brett is on the board. That’s big.

Also, Nuance has a market cap of $4.7 billion and an enterprise value of $6.2 billion; Apple has around $37.7 billion in cash, so they could easily buy the company for a significant premium.

In Netflix (NFLX), not only has Icahn reduced his stake and sold some of his shares this year, but he only owns $777 million and does not have the same type of board representation as he does at Nuance. Netflix also has a $28 billion market cap, so it would cost Apple $30 billion-plus (with a buyout premium) to buy Netflix. That’s too rich.

William Meade
President of The Billionaire’s Portfolio