ItsAValueTrap Posted January 4, 2014 Author Share Posted January 4, 2014 Size is an anchor. If Malone is diluting his LMCA stake, presumably he sees a lot of value in Sirius relative to the non-Sirius parts of LMCA??? Link to comment Share on other sites More sharing options...
Liberty Posted January 4, 2014 Share Posted January 4, 2014 Size is an anchor. If Malone is diluting his LMCA stake, presumably he sees a lot of value in Sirius relative to the non-Sirius parts of LMCA??? He obviously likes SIRI quite a bit. Predictable recurring cash flow + great operational leverage + untapped debt capacity + big NOLs. That's like catnip to Malone. If in a few months CHTR does a big deal (with possibly more to come), the absolute size of Liberty's stake in CHTR could go up quite a bit (and I think they have a cap around 35%, so they could double dip and increase their relative ownership in CHTR too), so SIRI's stake within LMCA would proportionally go back down some. The thing is, those cable deals would probably be a lot harder to pull off without full control of SIRI's FCF and debt capacity. If you want to do big deals, having complete use of a big asset like SIRI isn't an anchor, it's a facilitator, I think. Malone's probably looking a few steps ahead. In such a scenario, it's the other stuff that would be diluted most (LYV, B&N, and all the other misc. things). Link to comment Share on other sites More sharing options...
orion Posted January 4, 2014 Share Posted January 4, 2014 Why a 2:1 dividend of C shares for existing Liberty shareholders? I just don´t get it. Link to comment Share on other sites More sharing options...
ItsAValueTrap Posted January 4, 2014 Author Share Posted January 4, 2014 Presumably the share structure will allow Malone to have lots of voting power. He learned the hard way (AT&T) that control matters. The dividend also kind of increases liquidity for the incoming Sirius shareholders. I don't know if the exchange will be cool with the share structure though. Take a look at the NRCIA/B thread. Link to comment Share on other sites More sharing options...
bmichaud Posted January 4, 2014 Share Posted January 4, 2014 http://mobile.bloomberg.com/news/2014-01-03/liberty-media-offers-to-take-full-control-of-sirius-xm-holdings.html Link to comment Share on other sites More sharing options...
Guest wellmont Posted January 4, 2014 Share Posted January 4, 2014 this seems to me to be about increasing borrowing capacity of liberty for.... Link to comment Share on other sites More sharing options...
bmichaud Posted January 4, 2014 Share Posted January 4, 2014 I'd be pissed if I was a SIRI shareholder (which I may be soon...). LMC should be paying a fair price for full control over SIRI's cash flows. Link to comment Share on other sites More sharing options...
bmichaud Posted January 4, 2014 Share Posted January 4, 2014 This Barron's article pegs SIRI's FV at $5.50 to $6, 45% above current levels. http://m.barrons.com/articles/a/SB50001424053111904253404579210270735806960?mg=reno-barrons Does LMC have that kind of upside? My guess is not, especially given the need to invest more into CHTR in order to maintain its stake, at elevated levels no less. But not sure what SIRI shareholders can do in a minority position.... Link to comment Share on other sites More sharing options...
orion Posted January 6, 2014 Share Posted January 6, 2014 I haven´t found more infos on the new C shares, but will they maybe have some different voting rights? Or does Malone choose this way because he has to so in regards to do this deal tax free? If the C shares have different voting rights and A and B holders get also some C shares my thinking was that Malone will exchange his C shares to buy more B/A shares to hold/ increase his voting power over LMC. Any opinions? Link to comment Share on other sites More sharing options...
Sportgamma Posted January 6, 2014 Share Posted January 6, 2014 SIRI is trading at 3.85 pre-market... ::) Link to comment Share on other sites More sharing options...
bmichaud Posted January 6, 2014 Share Posted January 6, 2014 Maffei himeslf says they need a majority vote of the minority shareholders. I don't see how Icahn, Paulson, Loeb et al are not all over this. 2% of the non-LMC market cap has traded so far this morning, and I believe another 2% or so traded post market Friday. Wellmont - you have a good feel for these types of situations. What do you think? LMCA_SIRI_Transcript.pdf Link to comment Share on other sites More sharing options...
bmichaud Posted January 6, 2014 Share Posted January 6, 2014 6% of non-LMCA SIRI shares traded thus far. Link to comment Share on other sites More sharing options...
Liberty Posted January 6, 2014 Share Posted January 6, 2014 I haven´t found more infos on the new C shares, but will they maybe have some different voting rights? Or does Malone choose this way because he has to so in regards to do this deal tax free? If the C shares have different voting rights and A and B holders get also some C shares my thinking was that Malone will exchange his C shares to buy more B/A shares to hold/ increase his voting power over LMC. Any opinions? It was mentioned on the conference call on Friday (you should still be able to get a replay: (888) 203-1112 or (719) 457-0820 plus the passcode 2899775). the C shares will be non voting. The rationale stated was that SIRI is already controlled by LMCA with 50%+, so it wouldn't be a loss or a change of control. Link to comment Share on other sites More sharing options...
Guest wellmont Posted January 6, 2014 Share Posted January 6, 2014 Maffei himeslf says they need a majority vote of the minority shareholders. I don't see how Icahn, Paulson, Loeb et al are not all over this. 2% of the non-LMC market cap has traded so far this morning, and I believe another 2% or so traded post market Friday. Wellmont - you have a good feel for these types of situations. What do you think? malone left room for a bump in the ratio. there may be some small activists who make noise. looks a lot like sprint clearwire. except there were lots of Sprint "friendlies" who wanted out of that and sided with S. Link to comment Share on other sites More sharing options...
bmichaud Posted January 6, 2014 Share Posted January 6, 2014 lol http://www.cnbc.com/id/101312666 Link to comment Share on other sites More sharing options...
fareastwarriors Posted January 7, 2014 Share Posted January 7, 2014 In Sirius Offer, John Malone Is Up to His Old Tricks http://dealbook.nytimes.com/2014/01/06/in-sirius-offer-john-malone-is-up-to-his-old-tricks/ Link to comment Share on other sites More sharing options...
dcollon Posted January 7, 2014 Share Posted January 7, 2014 Billionaire Malone Returns to Empire Building Amid Cord Cutting http://www.bloomberg.com/news/2014-01-07/billionaire-malone-returns-to-empire-building-amid-cord-cutting.html Link to comment Share on other sites More sharing options...
Sportgamma Posted January 7, 2014 Share Posted January 7, 2014 The real prize in the deal could be Sirius's $7.7 billion in tax loss credits. Based on that alone, the deal feels like a steal. And it may be, but only for Malone. Typically, tax credits disappear when a company is acquired -- that way, the company's losses don't make it more valuable -- but because Malone already owns more than half of the company and is structuring the deal as a reorganization, Liberty gets to keep the credits. But no other acquirer would. The tax credits are valuable to Sirius, but Sirius only makes about $500 million before taxes a year, vs. $2 billion for Liberty. So the combined entity will be able to take advantage of the tax losses much more quickly. Indeed, the market seems to suggest that Malone's deal is close to fair. Sirius's shares on Tuesday were trading at $3.86, which means investors are betting that Malone may indeed be underpaying for Sirius, but not by much. Even in the age of activist shareholders, not every deal is a bad one. http://finance.fortune.cnn.com/2014/01/07/john-malone-sirius/?source=yahoo_quote Link to comment Share on other sites More sharing options...
loganc Posted January 7, 2014 Share Posted January 7, 2014 The real prize in the deal could be Sirius's $7.7 billion in tax loss credits. Based on that alone, the deal feels like a steal. And it may be, but only for Malone. Typically, tax credits disappear when a company is acquired -- that way, the company's losses don't make it more valuable -- but because Malone already owns more than half of the company and is structuring the deal as a reorganization, Liberty gets to keep the credits. But no other acquirer would. The tax credits are valuable to Sirius, but Sirius only makes about $500 million before taxes a year, vs. $2 billion for Liberty. So the combined entity will be able to take advantage of the tax losses much more quickly. Indeed, the market seems to suggest that Malone's deal is close to fair. Sirius's shares on Tuesday were trading at $3.86, which means investors are betting that Malone may indeed be underpaying for Sirius, but not by much. Even in the age of activist shareholders, not every deal is a bad one. http://finance.fortune.cnn.com/2014/01/07/john-malone-sirius/?source=yahoo_quote I do not think it is accurate that the Liberty Media parent generates more pretax than SIRI. TruePosition and Atlanta Braves generate de minimis cash flow as I recall. Therefore, it seems to me that the pro forma LMC-SIRI wouldn't burn the NOL at a more rapid rate than a standalone SIRI. I believe that the author of this article is confused by the income statement accounting of Liberty Media. Link to comment Share on other sites More sharing options...
bmichaud Posted January 7, 2014 Share Posted January 7, 2014 Exactly. SIRI makes up 80% of LMC's market cap - there is no way pre tax earnings from the other 20% is multiples of SIRI's. Link to comment Share on other sites More sharing options...
Liberty Posted January 8, 2014 Share Posted January 8, 2014 http://ir.libertyinteractive.com/events.cfm Liberty's CEO spoke for half an hour at CES, touched on things related to LMCA, LINTA and LVNTA. Link to comment Share on other sites More sharing options...
loganc Posted January 11, 2014 Share Posted January 11, 2014 I have noticed that there is a recent LMCA write up on VIC. While this may be a bit of a shady request, would anyone here that is a VIC member be willing to comment on the content of the write up for those of us who are not a part of the club? I can't imagine that anything written there is news to people in this thread but I can't help but be curious. Link to comment Share on other sites More sharing options...
fareastwarriors Posted January 13, 2014 Share Posted January 13, 2014 http://www.bloomberg.com/news/2014-01-13/charter-makes-61-3-billion-offer-to-acquire-time-warner-cable.html Charter Makes $61.3 Billion Offer to Acquire Time Warner Cable Link to comment Share on other sites More sharing options...
Yours Truly Posted January 13, 2014 Share Posted January 13, 2014 I have noticed that there is a recent LMCA write up on VIC. While this may be a bit of a shady request, would anyone here that is a VIC member be willing to comment on the content of the write up for those of us who are not a part of the club? I can't imagine that anything written there is news to people in this thread but I can't help but be curious. Also interested if anyone can be so kind to summarize or post it here Link to comment Share on other sites More sharing options...
Liberty Posted January 14, 2014 Share Posted January 14, 2014 http://www.bloomberg.com/news/2014-01-13/charter-makes-61-3-billion-offer-to-acquire-time-warner-cable.html Charter Makes $61.3 Billion Offer to Acquire Time Warner Cable No real surprise as far as as I can tell. Curious to see how much Liberty Media would contribute and if they'd increase their share of Charter. If both this and Sirius go through, LMCA's market cap will balloon up quite a bit. Here's the official letter from Charter to TWC: http://phx.corporate-ir.net/phoenix.zhtml?c=112298&p=irol-newsArticle&ID=1890378&highlight= Charter has timed its latest bid strategically. All of Time Warner Cable's directors stand for election each year, and new board nominees are due mid-February. If a large shareholder feels the board is too resistant to a deal, it could nominate a slate of more deal-friendly directors before the deadline. http://online.wsj.com/news/articles/SB10001424052702303819704579319114113034726?mg=reno64-wsj&url=http%3A%2F%2Fonline.wsj.com%2Farticle%2FSB10001424052702303819704579319114113034726.html Link to comment Share on other sites More sharing options...
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