bmichaud Posted January 14, 2014 Share Posted January 14, 2014 Some flash notes on the deal. 2014-01-14_CHTR.OQ_Deutsche_Bank_Pay_TV_Spotlight___CHTR_Makes_TWC_Offer_Public.654819911.pdf2014-01-14_TWC_Wells_Fargo_S_TWC__Let_The_Tug-Of-War_Begin--Raise_Val_Range_Post_CHTR_Bid.654779961.pdf2014-01-14_TWC=US_Stifel_Nicola_TWC_Rejects_$132.50_sh_Offer;_Counters_at_$160.654759521.pdf2014-01-13_TWC=US_Stifel_Nicola_CHTR__Bear-Hug__Letter_Reportedly_Offers_$132.50_S...Not_Enough.654750782.pdf2014-01-14_TWC=US_Jefferies__C_Time_Warner_Cable_Inc.__TWC__HOLD__Charter_Lobs_in_Initial_Bid.654752481.pdf Link to comment Share on other sites More sharing options...
loganc Posted January 14, 2014 Share Posted January 14, 2014 Some flash notes on the deal. Many thanks for posting this. Link to comment Share on other sites More sharing options...
Liberty Posted January 14, 2014 Share Posted January 14, 2014 Thanks bmichaud! Link to comment Share on other sites More sharing options...
bmichaud Posted January 14, 2014 Share Posted January 14, 2014 sure thing! Link to comment Share on other sites More sharing options...
bmichaud Posted January 14, 2014 Share Posted January 14, 2014 http://video.cnbc.com/gallery/?video=3000235552&__source=yahoo%7cheadline%7cquote%7cvideo%7c&par=yahoo Link to comment Share on other sites More sharing options...
loganc Posted January 14, 2014 Share Posted January 14, 2014 This is epic - http://dealbook.nytimes.com/2014/01/14/nader-an-adversary-of-capitalism-now-fights-as-an-investor/ Ask Mr. Nader about Sirius, and he talks for 10 minutes about its financial state and why Mr. Malone’s bid is undervalued. He calls Mr. Malone a “buccaneer” who is smart and has made a lot of money. He considers Mr. Malone’s bid for Sirius opportunistic and sees “Sirius stock really moving into a growth pattern” because it is “paying down more debt.” Referring to the company’s price to earnings ratio, he says Sirius is “moving into a decent p/e due to recent dividend payments.” Mr. Malone, he adds, is coming in with the stock unusually low — it was $3.68 on Monday — and that “this thing could go to 6, 8, 10 dollars per share.” Mr. Malone’s bid, Mr. Nader goes on, is just like Mr. Icahn’s bid in the 1980s for TWA, back when Mr. Icahn was known as a corporate raider. Certainly news to me that SIRI is going to be paying down debt and that the recent dividend payments are improving the P/E. Link to comment Share on other sites More sharing options...
bmichaud Posted January 14, 2014 Share Posted January 14, 2014 Charter presentationCharter_and_Time_Warner_Cable.pdf Link to comment Share on other sites More sharing options...
orion Posted January 14, 2014 Share Posted January 14, 2014 Quick question because I´m not used to read these documents. Do I read this correctly that Mr. Malone sold about 40% of his LMCA holdings and bought almost the same amount in LMCB? http://www.sec.gov/Archives/edgar/data/937797/000122520813025976/xslF345X03/doc4.xml Link to comment Share on other sites More sharing options...
loganc Posted January 14, 2014 Share Posted January 14, 2014 Quick question because I´m not used to read these documents. Do I read this correctly that Mr. Malone sold about 40% of his LMCA holdings and bought almost the same amount in LMCB? http://www.sec.gov/Archives/edgar/data/937797/000122520813025976/xslF345X03/doc4.xml It appears to me that Malone traded some of his LMCA shares for LMCB shares owned by Robert Bennett. I am speculating but it is possible that Bennett wanted to get some liquidity in his LMC position and Malone traded him LMCA shares at a premium (more shares) for the LMCB shares since they are super voting. Link to comment Share on other sites More sharing options...
orion Posted January 15, 2014 Share Posted January 15, 2014 Tank you loganc. This would make sense. Link to comment Share on other sites More sharing options...
bmichaud Posted January 15, 2014 Share Posted January 15, 2014 TWC response TWCPRESENTATION_vFINAL1.pdf Link to comment Share on other sites More sharing options...
buylowersellhigh Posted January 15, 2014 Share Posted January 15, 2014 Anybody looking to buy LMCA on this pullback? One good point mentioned (think it was Liberty) was that with Sirium and TWC, LMCA becomes a much bigger company. This usually leads to lower returns.. Thoughts? Link to comment Share on other sites More sharing options...
Liberty Posted January 15, 2014 Share Posted January 15, 2014 One good point mentioned (think it was Liberty) was that with Sirium and TWC, LMCA becomes a much bigger company. This usually leads to lower returns.. Thoughts? It can lead to lower returns, unless you are in businesses where scale improves your economics. I think it's certainly the case for cable/media (CHTR). As for Siri, the market cap and share count of LMCA would go up, but the underlying business (SIRI) would be the same, so that bigger mkt cap size wouldn't change anything. In fact, it would help because LMCA would have control over SIRI's entire free cashflow and could redeploy that wherever is best (buybacks, acquisitions, leverage up, etc). Malone's track record also shows that he's not afraid of spinoffs. If size ever became a disadvantage rather than an advantage, I don't think he'd be shy about cutting some assets loose. Just my 2 cents, FWIW. Link to comment Share on other sites More sharing options...
buylowersellhigh Posted January 15, 2014 Share Posted January 15, 2014 One good point mentioned (think it was Liberty) was that with Sirium and TWC, LMCA becomes a much bigger company. This usually leads to lower returns.. Thoughts? It can lead to lower returns, unless you are in businesses where scale improves your economics. I think it's certainly the case for cable/media (CHTR). As for Siri, the market cap and share count of LMCA would go up, but the underlying business (SIRI) would be the same, so that bigger mkt cap size wouldn't change anything. In fact, it would help because LMCA would have control over SIRI's entire free cashflow and could redeploy that wherever is best (buybacks, acquisitions, leverage up, etc). Malone's track record also shows that he's not afraid of spinoffs. If size ever became a disadvantage rather than an advantage, I don't think he'd be shy about cutting some assets loose. Just my 2 cents, FWIW. Thanks Liberty. Excellent points. Link to comment Share on other sites More sharing options...
Yours Truly Posted January 15, 2014 Share Posted January 15, 2014 One good point mentioned (think it was Liberty) was that with Sirium and TWC, LMCA becomes a much bigger company. This usually leads to lower returns.. Thoughts? It can lead to lower returns, unless you are in businesses where scale improves your economics. I think it's certainly the case for cable/media (CHTR). As for Siri, the market cap and share count of LMCA would go up, but the underlying business (SIRI) would be the same, so that bigger mkt cap size wouldn't change anything. In fact, it would help because LMCA would have control over SIRI's entire free cashflow and could redeploy that wherever is best (buybacks, acquisitions, leverage up, etc). Malone's track record also shows that he's not afraid of spinoffs. If size ever became a disadvantage rather than an advantage, I don't think he'd be shy about cutting some assets loose. Just my 2 cents, FWIW. I would forsee an eventual Siri tracker should they acquire 100% of the company and maybe a spin-off/tracker of the CHTR/TWC too similar to their proposed spin-off of TripAdvisor from LVNTA Link to comment Share on other sites More sharing options...
ItsAValueTrap Posted January 15, 2014 Author Share Posted January 15, 2014 It can lead to lower returns, unless you are in businesses where scale improves your economics. I generally agree that scale leads to better economics. However, once these companies get too big the US government may step in and break them up. 2- If the merger goes through, maybe we should take a good look at Liberty Ventures. Malone's best ideas may end up in Ventures because he will own a greater percentage of Ventures than Liberty Media. Link to comment Share on other sites More sharing options...
Liberty Posted January 15, 2014 Share Posted January 15, 2014 However, once these companies get too big the US government may step in and break them up. I'm not sure I see that, at least not in the foreseeable future. There's a lot of competition in that space. Cable is still very fragmented, and even comcast isn't that big if you count the telecoms and satellite players. And now you even have Google Fiber, etc. 2- If the merger goes through, maybe we should take a good look at Liberty Ventures. Malone's best ideas may end up in Ventures because he will own a greater percentage of Ventures than Liberty Media. Venture's interesting, but I don't understand it enough (who does?). I know you're not as big a fan of LINTA, but personally I like it almost as much as LMCA. I think the new trackers could unlock a lot of value, and even if they don't in the short term, it only means more buybacks until the market wakes up. Good path forward either way. Once QVC trades at a multiple similar to HSN, I expect them to merge and bring the margins there to QVC levels and beyond thanks to shared logistics, and then use the HSN FCF now under their control to build more value. Link to comment Share on other sites More sharing options...
buylowersellhigh Posted January 15, 2014 Share Posted January 15, 2014 However, once these companies get too big the US government may step in and break them up. I'm not sure I see that, at least not in the foreseeable future. There's a lot of competition in that space. Cable is still very fragmented, and even comcast isn't that big if you count the telecoms and satellite players. And now you even have Google Fiber, etc. 2- If the merger goes through, maybe we should take a good look at Liberty Ventures. Malone's best ideas may end up in Ventures because he will own a greater percentage of Ventures than Liberty Media. Venture's interesting, but I don't understand it enough (who does?). I know you're not as big a fan of LINTA, but personally I like it almost as much as LMCA. I think the new trackers could unlock a lot of value, and even if they don't in the short term, it only means more buybacks until the market wakes up. Good path forward either way. Once QVC trades at a multiple similar to HSN, I expect them to merge and bring the margins there to QVC levels and beyond thanks to shared logistics. Liberty, Do you have a fair value range for LMCA? Link to comment Share on other sites More sharing options...
loganc Posted January 15, 2014 Share Posted January 15, 2014 I think LMC NAV is in the neighborhood of 18.5B. There is also another 1B+ that could come from the Vivendi litigation. Similar to Liberty, I am very excited about the prospect of Malone/Maffei getting full control of the SIRI cash flows. Link to comment Share on other sites More sharing options...
ItsAValueTrap Posted January 15, 2014 Author Share Posted January 15, 2014 I'm not sure I see that, at least not in the foreseeable future. There's a lot of competition in that space. Cable is still very fragmented, and even comcast isn't that big if you count the telecoms and satellite players. And now you even have Google Fiber, etc. It happened in the past and it may very well happen again. The government usually only goes after companies that make too much money. It's a good problem to have. (Unless you were one of the companies that paid too much for cable assets.) But I do agree that it will take a lot of time to get there. When Sirius and Charter mature, Malone will probably look at trading them for better businesses. Link to comment Share on other sites More sharing options...
jay21 Posted January 15, 2014 Share Posted January 15, 2014 More scheming http://finance.yahoo.com/news/exclusive-charter-makes-approach-comcast-231832342.html NEW YORK (Reuters) - Charter Communications Inc reached out to Comcast Corp this week about teaming up to buy Time Warner Cable Inc, after Time Warner Cable rejected its $37.3 billion buyout bid, according to people familiar with the matter. Charter approached Comcast on Wednesday to discuss carving up the second-largest U.S. cable company's systems and subscribers, the people said. Charter, the No. 4 U.S. cable provider, and Comcast, the top U.S. cable provider, are currently in preliminary discussions about how to structure a potential alliance, the people said. One possibility is that Charter buys all of Time Warner Cable and sells off some of its markets and subscribers to Comcast, one of the people said. The two companies held similar discussions late last year but those talks did not progress at that time. The people asked not to be named because they were not authorized to speak with the media. Comcast, Time Warner Cable and Charter declined to comment. Link to comment Share on other sites More sharing options...
Liberty Posted January 16, 2014 Share Posted January 16, 2014 Liberty, Do you have a fair value range for LMCA? Check your private messages :) Link to comment Share on other sites More sharing options...
racemize Posted January 22, 2014 Share Posted January 22, 2014 Ok, so I made a list of things Malone owns (based on post from ValueTrap, although I got different numbers on liberty global, so please correct me if I missed something): John Malone – net worth of 6.7 billion (Forbes Oct 2013) Liberty Media – 9.3% of shares outstanding. Chairman. as of 1/22/14, market cap is 15.67 billion, his share is 1.45b (21.2%) 2.46 million LMCA (2.2%), 8.78 million LMCB (88.8%) out of 120.6m shares Discovery – 4.3% of shares outstanding. Director as of 1/22/14, market cap is 19.59 billion, his share is: 842m (12.6%) 0.6 A (<1%), 6.1 B (93%), 3.86C (4.1%) of 245m shares Liberty Interactive – 5.75% of shares outstanding. Chairman as of 1/22/14, market cap is 14.22 billion, his share is 817m (12.2%) 3.36 A (<1%), 27.69 B (94.3%) of 540m shares Liberty Global – 3.25% of shares outstanding. Chairman. as of 1/22/14, market cap is 19.49 billion, his share is 633m (9.4%) 1.14 A (<1%), 8.79 B (86.4%), 2.94C (1.8%) of 395m shares Liberty Ventures – 5.58% of shares outstanding. Chairman. as of 1/22/14, market cap is 4.36 billion, his share is: 243m (3.6%) 0.67 A (1.9%) 1.38 B (94.5%) of 37m shares Starz – 9.23% of shares outstanding. as of 1/22/14, market cap is 2.28 billion, his share is: 210m (3.1%) 2.46 A (2.2%), 8.78 B (88.8%) of 122m shares Ascent Capital – 6.4% of shares outstanding as of 1/22/14, market cap is 1.2 billion, his share is: 77m (1.2%) 0.2 A (1.48%), 0.7B (95.5%) of 14m shares Left over (land?): 2.4 billion (36.2%) Link to comment Share on other sites More sharing options...
jay21 Posted January 22, 2014 Share Posted January 22, 2014 Ok, so I made a list of things Malone owns (based on post from ValueTrap, although I got different numbers on liberty global, so please correct me if I missed something): John Malone – net worth of 6.7 billion (Forbes Oct 2013) Liberty Media – 9.3% of shares outstanding. Chairman. as of 1/22/14, market cap is 15.67 billion, his share is 1.45b (21.2%) 2.46 million LMCA (2.2%), 8.78 million LMCB (88.8%) out of 120.6m shares Discovery – 4.3% of shares outstanding. Director as of 1/22/14, market cap is 19.59 billion, his share is: 842m (12.6%) 0.6 A (<1%), 6.1 B (93%), 3.86C (4.1%) of 245m shares Liberty Interactive – 5.75% of shares outstanding. Chairman as of 1/22/14, market cap is 14.22 billion, his share is 817m (12.2%) 3.36 A (<1%), 27.69 B (94.3%) of 540m shares Liberty Global – 3.25% of shares outstanding. Chairman. as of 1/22/14, market cap is 19.49 billion, his share is 633m (9.4%) 1.14 A (<1%), 8.79 B (86.4%), 2.94C (1.8%) of 395m shares Liberty Ventures – 5.58% of shares outstanding. Chairman. as of 1/22/14, market cap is 4.36 billion, his share is: 243m (3.6%) 0.67 A (1.9%) 1.38 B (94.5%) of 37m shares Starz – 9.23% of shares outstanding. as of 1/22/14, market cap is 2.28 billion, his share is: 210m (3.1%) 2.46 A (2.2%), 8.78 B (88.8%) of 122m shares Ascent Capital – 6.4% of shares outstanding as of 1/22/14, market cap is 1.2 billion, his share is: 77m (1.2%) 0.2 A (1.48%), 0.7B (95.5%) of 14m shares Left over (land?): 2.4 billion (36.2%) Based on some articles I read on Bloomberg, I believe he has a large stake in DTV. Also, he mentioned in 1 interview that he is usually levered so his assets > net worth. In that same interview I think he said 90+% of his investable net worth is in the Liberties, Discovery, etc. Link to comment Share on other sites More sharing options...
racemize Posted January 22, 2014 Share Posted January 22, 2014 There's no mention of Malone on the DTV proxy, and in 2011, they stated they did a asset exchange. I assumed he was out of it, based on that. All of the post is based on proxy statements, so I don't know how he would get to 90%+ in them, unless Forbes got the networth number wrong. He is also the largest land owner in the U.S., so there's got to be a fair number for that. Link to comment Share on other sites More sharing options...
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