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Liberty Media Calls Off Sirius XM Takeover

NEW YORK (The Deal) -- Buried in a statement about the creation of tracking stocks, Liberty Media  (LMCA - Get Report) said that it is withdrawing a bid to acquire minority shares of satellite radio group Sirius XM Holdings (SIRI - Get Report) for about $10.4 billion.

"In light of the tracking stock distribution, our offer for Sirius XM is no longer applicable," explained Liberty CEO Greg Maffei in a press release.

In January, John Malone's media group offered to pay $3.86 worth of non-voting Series C Liberty stock for each share of Sirius. The deal valued the 2.8 billion minority shares at about $10.4 billion, and valued Sirius XM's nearly 6.1 million in total equity at about $22.4 billion.

When announcing the offer in January, Maffei said that purchasing the remaining shares of Sirius XM would increase Liberty's "financial and strategic flexibility."

Now that Liberty-backed Charter Communications  (CHTR - Get Report) has been spurned in its offer for Time Warner Cable (TWC - Get Report), Malone may feel less urgency to boost liquidity by rolling up Sirius XM.

As part of the restructuring, Liberty Media's assets will be attributed to either the to-be-created Liberty Media Group tracking stock or to the Liberty Broadband Group tracker.

Liberty Broadband Group will reflect the company's stakes in Charter Communications, Time Warner Cable and geo-location technology company TruePosition. The Liberty Media tracker will represent the positions in SiriusXM, Live Nation Entertainment (LYV) and Barnes & Noble (BKS) and others.

Investors holding Liberty's A and B series common stock will receive one share of Liberty Media and four shares of Liberty Broadband.

Malone has frequently created tracking stocks as a prelude to a formal spinoff of a group of assets.

Liberty said Thursday it would engage with a special committee of Sirius XM's board. "We remain enthusiastic owners of 53% of Sirius XM," Maffei said.

In after hours trading, Sirius XM shares dropped 8 cents, or 2.67 %, to $3.28 each. The stock recovered early Friday, trading at $3.44 per share.

Liberty gained 89 cents, or 0.7%, after hours, to $127.03 per share. Its stock continued to climb, hitting $136.72 Friday morning.

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SYM TRADE IT LAST %CHG
CHTR $173.63 -1.50%
LMCA $38.62 0.94%
SIRI $3.90 0.65%
TWC $177.84 -0.41%
AAPL $130.77 0.62%

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DOW 18,098.59 +86.65 0.48%
S&P 500 2,114.12 +4.52 0.21%
NASDAQ 5,092.5770 +16.0530 0.32%

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