Is Liberty Media Corp (NASDAQ:LMCA) More For Sirius?

Posted by Kristi Scott January 7, 2014 0 Comment 1072 views


Liberty Media Corp (NASDAQ:LMCA), the $16.23 billion market capped holding company which has been active in the media and communications sector since its inception in 2012 has been prowling around for right sized acquisitions recently. Its sights are set on Sirius XM, which is a satellite radio company with a huge listenership across U.S. It boasts of a strong revenue line and is expected to beef up the finances of Liberty Media Corp (NASDAQ:LMCA) if the deal does get closed.

Deal Modalities

Liberty Media Corp (NASDAQ:LMCA) has made a $10.6 billion bid to buy out the reminder of the minority stake holders who are invested into this successful satellite radio company. This means the each share of Sirius XM is being valued at $3.68 per share which represents a 7 percent premium on January 3 close of business price. This deal is being structured via a stock exchange program which envisions creating a new class of stock and offering the existing share holders of Sirius 0.076 share of Liberty Media Corp (NASDAQ:LMCA) in exchange for 1 share of Sirius. If the deal swings through, the market cap of the holding company will balloon to $23 billion. Analysts expect the offer by Liberty to be spurned by the board of Sirius with a demand for higher valuations.

Eyes Cash Flow And Financial Muscle With Sirius Take Over

This deal with Sirius going through is very important for Liberty Media Corp (NASDAQ:LMCA) because, it will beef up revenue stream and  financial reach of the firm and will enable it to seek external funding to help buyout the second largest media house in U.S, Time Warner. The importance of securing Sirius into its fold for Liberty Media Corp (NASDAQ:LMCA) can be gauged by these following words of its CEO Greg Maffei who has been quoted as saying, “One supposition could be that this allows us to go make incremental investments in Charter, to maintain our stake in Charter because we have access to the cash flow at SIRI and the borrowing capacity at SIRI. That’s one way that (it) could help get the Time Warner Cable deal done.”



About Kristi Scott

Kristi Scott joined GDP Insider in 2005 as a Wall Street reporter for the Business and Market section. Kristi covers the stock market, financial markets and personal finance. Her awards have come from the National Federation of Professional Writers, the Ohio Newspaper Association, the Cleveland Press Club, the Society of Professional Journalists and Suburban Newspapers of America. Kristi was named SNA's national Journalist of the Year

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