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Like with DISH Network, hedge fund investors in
Liberty Media(LMCA) will have to decide whether the media conglomerate will be a buyer or seller.
The quixotic John Malone-Chaired cable and media conglomerate with stakes in
Barnes & Noble's(BKS),
Live Nation(LYV) and
Sirius XM Radio(SIRI) could be a buyer or seller of companies in 2012, and that's enough to pique the interest of Warren Buffett-run
Tiger Global Management,
Och Ziff Capital Management and David Einhorn-run
Greenlight Capital Management, among a bevy of activist and value oriented investors.
In November, Liberty Media opened up a $1.5 billion credit facility, which was considered by analysts to be a financing that could lead to acquisitions. In a Nov. 11 research note, Robert Routh of Phoenix Partners wrote that the loan could be used for Liberty Media to help purchase Barnes & Noble, which it already holds a near 17% stake in. Previous to Liberty Media's $204 million stake purchase, it had offered to buy a controlling 70% stake in the struggling bookseller for $17 a share, but the company's Chairman and 30% shareholder Leonard Riggio rejected the offer in May 2011.
In January, Morningstar analyst Peter Wahlstrom said that Liberty Media could also look to buy Barnes & Noble's
Nook digital books unit after the company announced a spinoff plan of the fast growing business.
For more on Barnes & Noble's spin strategy and earnings struggles, see
4 deals that rewrote Barnes & Noble history.
Another possibility is for Liberty Media to boost its stake in satellite radio giant Sirius XM radio, as prospects for the debt-laden and once near bankrupt company brighten. Such a move might be strongly timed for an auto's rebound that would
benefit Sirius and its in-vehicle satellite radio business. In November, the
New York Post reported that Liberty Media Chairman and near 2% shareholder was in talks to increase the company's Sirius investment, which presently stands at 40% after a life-saving preferred share investment and $530 million loan in Mar. 2009. At that time, the auto industry was in the process of crumbling, with General Motors and Chrysler reeling toward bankruptcy.
In a Feb. 9 report, Pivotal Research Group analyst Jeffrey Wlodarczak increased his price target for Liberty Media to $107 a share, driven by an increase in the value of Sirius XM Radio. "We continue to believe Liberty inevitably increases its stake in SIRI above 50% prior to an inevitable merger," wrote Wlodarczak, who noted that by clawing back
Starz, the company now has up to $9 billion that it can use for share buybacks or acquisitions of investments like Sirius and LiveNation.
Tiger Global boosted its stake in Liberty Media to nearly 2 million shares and Och Ziff Capital Management more than doubled its stake with an over 1.4 million share position, but both moves were overshadowed by Warren Buffett and David Einhorn's initial investments in the company.
For Och Ziff, the share buying represented a continued incremental addition to the firm's Liberty Media stake that was opened in the quarter that ended in Mar. 2011, while Tiger Global's investment signaled a renewed interest in the company after paring most of a 3.5 million share stake between Dec. 2010 and Sept. 2011.
Meanwhile, Buffett bought over 1.7 million shares valued at roughly $150 million, while Einhorn's Greenlight Capital took a 980,000 share stake now worth over $84 million. Here's a look at
Warren Buffett's biggest stock investments
A dark horse in the share buying was activist fund
Jana Partners, which boosted its stake to 1.3 million shares, nearly doubling a Liberty Media stake that was opened in Sept. 2011.
Liberty Media is expected to earn $1.6 billion in sales and $191 million in profit in 2011, according to consensus estimates from analysts polled by
Bloomberg, who give the company's shares a price target of $97.13. In 2012, the company's sales are expected to rise to $1.9 billion, but profits are expected to fall to $117 million on shrinking margins. In fourth quarter earnings, Liberty Media is expected to earn 32 cents a share, according to consensus estimates from