This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Sirius Moves Closer to Being Bought (Update 2)

The quixotic John Malone-chaired cable and media conglomerate has stakes not only in Sirius, but also in Barnes & Noble (BKS - Get Report) and Live Nation (LYV - Get Report), and has never been shy about tax-advantaged acquisitions. Sirius is certainly that, as it has net operating losses (NOL) and will not have to pay taxes for the foreseeable future.

StockGuy82 on Stock Twits tweeted the NOL would be "very advantageous to prospective buyers."

Liberty Media has historically spun out its investments, having done so with Discovery Communications (DISCA), DirectTV (DTV) and others, but that may not be the case this time.

Malone's style prompted Warren Buffett-run Berkshire Hathaway (BRK.A - Get Report) to recently acquire a stake in Liberty Media. Several hedge funds, including Tiger Global Management, Och Ziff Capital Management and David Einhorn-run Greenlight Capital Management also have positions.

(See the rest of Warren Buffett's portfolio.)

Bazinet writes in his research note that Liberty Media has access to $6.5 billion in liquidity from three sources: "1) $3.85 billion from Liberty Media cash on hand, existing Sirius debt, existing lines of credit and FCF in 2012; 2) $1.4 billion from Sirius cash on hand and FCF in 2012; and 3) $1.25 billion in cash from Liberty Ventures." Purchasing an 80% stake of Sirius at $2.50 per share would cost $6.36 billion, so Liberty Media has the means to do it.

Bazinet is not the only analyst who says a merger or takeover is likely. 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.

The signs for a potential Sirius merger are there, with more than one analyst forecasting an inevitable merger. Whether it happens is in Malone's hands, but the groundwork has been laid.

Shares of Sirius are higher today, up 1.35% to $2.25.

For more on M&A, see 5 deal ready stocks loved by hedge funds portfolio's.

-- Written by Chris Ciaccia and Antoine Gara in New York

>To follow the writer on Twitter, go to

>To submit a news tip, send an email to:
2 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
BRK.A $201,624.00 0.00%
BKS $13.14 0.00%
LMCA $40.72 0.00%
LYV $25.61 0.00%
SIRI $4.14 0.00%


Chart of I:DJI
DOW 17,798.49 -14.90 -0.08%
S&P 500 2,090.11 +1.24 0.06%
NASDAQ 5,127.5250 +11.3820 0.22%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs