Liberty Media (LMCA) is creating two new tracking stocks: One will be known as Liberty Media, and the other Liberty Broadband. Investors will receive one share of the former tracking stock, and four shares of the latter, for each Liberty share they currently own.
Shareholders will also get "a subscription right to acquire one additional series A or series B share of Liberty Broadband tracking stock for every five shares of series A or five shares of series B Liberty Broadband tracking stock they receive in the Distribution."
The subscription rights will be priced at "a 20% discount to the 20-trading day volume weighted average trading price of Liberty Broadband tracking stock following the closing of the Distribution."
The tracking stocks are expected to trade under the symbols LBRDA and LBRDB. The broadband tracking stock will cover Liberty's stakes in Charter and Time Warner Cable, and its TruePosition subsidiary.
As a result of the change, Liberty says its previous offer for Sirius XM (SIRI) is "no longer applicable." The company adds it remains an "enthusiastic" owner of 53% of Sirius.
John Malone has given the rights of first refusal to the CEOs of Discovery Communications (DISCA) and Liberty Global (LBTYA) to buy his holdings in their respective companies.
Discovery chief David Zaslav will be able to purchase Malone's 29% voting stake in the TV broadcaster; at Liberty, Michael Fries will be able to acquire Malone's 27% voting interest.
However, Malone has no intention of reducing his involvement in the businesses just yet, nor has he laid out any similar plans for his holding in Liberty Media (LMCA). Rather, the rights given to Zaslav and Fries represent planning for the future.
Comcast (CMCSA) reportedly prefers joining up up with Charter Communications (CHTR) to bid for Time Warner Cable rather (TWC) than making an offer on its own.
Comcast thinks TWC's asking price of $160 a share is too high, while the latter isn't interested in selling itself in a piecemeal fashion.
Charter is willing to let Comcast have TWC's New York-area cable systems in exchange for Comcast backing Charter's bid. The New York network would fit in nicely with Comcast's operations in Connecticut and New Jersey.
Sirius XM Radio (SIRI +0.8%) has named former DirecTV CEO Eddy Hartenstein, former DaimlerChrysler CEO James Holden, and long-time American Express executive Joan Amble to a 3-person special committee to evaluate Liberty Media's (LMCA +0.4%) $3.68/share bid.
SIRI shares closed the day at $3.86, a 4.9% premium to Liberty's bid, as investors continue holding bets that the offer will be boosted.
Comcast (CMCSA) and Charter (CHTR) have reportedly discussed breaking up Time Warner Cable (TWC) in any joint bid for the company in order to overcome antitrust objections to a deal.
The transaction would resemble Comcast's and Time Warner's acquisition of Adelphia Communications in 2006, when Comcast gained 1.7M customers and Time Warner 3.3M.
A break-up of Time Warner would also make it easier for Charter to gain financing, given that it's much smaller than Time Warner.
Meanwhile, the NYTcarries a profile of John Malone, whose Liberty Media (LMCA) owns 27% of Charter. The article reports that Time Warner Cable has contacted Comcast about a possible transaction, leading to early talks.
Charter Communications (CHTR) is reportedly working with Goldman Sachs to acquire Time Warner Cable (TWC) in a move that's part of an attempt by John Malone, whose Liberty Media (LMCA) owns 27% in Charter, to rebuild his U.S. cable empire. Buying TWC, which rebuffed Malone's maneuvering earlier this year, would be a stretch for Charter, due to its high debt and its market cap of$12.6B vs TWC's $33.14B. Notwithstanding, TWC shares jumped 8% in AH trading.
Time Warner Cable (TWC) has reportedly contacted Cablevision (CVC) and Cox Cable about buying them as TWC looks to grow through acquisitions rather than be bought by John Malone's Liberty Media (LMCA), which owns 27% of Charter Communications (CHTR). While talks with Cox and Cablevision haven't led too far, the latter's founder and Chairman, 86-year Chuck Dolan, could be ready to sell. As for Liberty, TWC believes a tie-up for Charter would add too much debt and it is skeptical about prospective synergies.
More on Liberty Media's hunt for Time Warner Cable: (previous): A bid to purchase the cable operator is being structured by John Malone's company even though Time Warner Cable (TWC +4.2%) hasn't indicated serious interest. Analysts see Time Warner Cable wanting at least a 20% premium before it warms up to the notion. The end game for Liberty Media (LMCA +2.4%) is to increase its scale through horizontal acquisitions which could be achieved bringing Charter Communications and TWC under the same corporate umbrella.
Deutsche Bank's Doug Mitchelson doesn't think Charter Communications (CHTR +1.6%) and Time Warner Cable (TWC -2.1%) can complete a deal that would pay TWC shareholders in the $110-$125 range. Instead, the analyst believes TWC shareholders would have to receive a price closer to $146 in order to satisfy the board. Also in the mix is Liberty Media (LMCA +0.7%) with its 27% stake in Charter.
Deal on: Liberty Media (LMCA) will take a 27.3% stake in Charter Communications (CHTR) by paying $95.50 per share for a deal price of $2.617B if board approval is granted. As part of the proposed deal, Liberty will nab four spots on Charter's board. (Previous CHTR-LMCA: I, II)
More on Liberty Media (LMCA) - Charter (CHTR) deal: Liberty is reportedly close to agreeing to a deal to buy a 25% stake in Charter for $2.5B from private-equity firms, including Apollo (APO). The move would mark John Malone's return as a major force in U.S. cable TV after he sold Tele-Communications to AT&T for $48B in 1999, and would add to large international acquisitions.
The inevitable has finally happened and Liberty Media (LMCAD) has taken majority control of Sirius XM Radio (SIRI) by increasing its stake to 50.7% after acquiring 50M shares at $3.15 each. Liberty has said in the past that Sirius should improve its technology and expand internationally.
Liberty Media (LMCA) has won FCC approval to obtain de jure control of Sirius XM (SIRI). Liberty, which currently has a 49.8% stake in the satellite radio provider, says it expects to gain control of Sirius within the next 60 days. SIRI +1.3% AH.