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Breakingviews: Malone cannot be Sirius

Monday, Jan 06, 2014 - 03:03

Jan 6 - Liberty Media's offering little incentive for the satellite radio company's minority investors to sell out, argue Antony Currie and Rob Cyran. Chairman John Malone may have to up his bid.

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So as -- the first full week of the year and forty Joseph Mullen is a drizzle tricks ropes and you're looking at what. His company limiting media is doing with serious accent -- Malone has a long history of kind of taking advantage of -- -- -- -- -- -- -- needs offered a similar thing again with serious -- liberty owns just over half of serious and other offering to by the rest of edit a wonderful 3% premium that's that's pretty -- and that's in the scheme of things street supreme it is virtually nothing -- compared to find him. Notion virtually nothing and the other thing is that he's offering them nonvoting stock in a company which. Has argument let's impressive Chris Davis he delivered immediately suppressed a -- answers. So why were investors take that and the question one reason they don't really have much the choice because Malone controls the company. Yes and the other reason is that in it is trading above the offer price that typically have to come back out and get a nice what often happens minority by outside so we've we've seen this in the past. People this -- -- an arsenal put into a recipe to rise -- -- -- -- his arms in the -- start buying a stock the Arabs are perfectly happy with you know 5% return because you know it. Why not take its money for free. And unity you'll see a series of these kind of slightly right -- revised offers and eventually probably become -- -- 3% -- pretty probably about status of that is not on the outside but yet they get a get there it's very nationalist. The Vatican Malone has a history of kind of -- bring up -- companies that he's done phenomenally with serious because. The reason he owned the debris owns a stake -- -- -- because serious I'm almost bankrupt couple years ago when he lent what liberties that. Predecessor went over 500 million to the company at 15% interest rates in exchange 40% of the equity basically. And now he can't sweet deal and now he's off yet now there are going to buy it that it almost half the company for ten billion dollars and that means you know make quite bit and accidentally. So you can shelves today about this if you think about other spots they can't push back if they can moan if you if you get somewhere ringleader to kind of leave the shareholders and saying you know we're not gonna take this perhaps thinking get it sweeter bid that. The odds are some deals after it had a relatively modest premium front. So what next that you think will will save the bucket full -- a couple weeks and then we'll -- making them -- I imagine it's gonna happen in the interest and of course is what Malone is going to -- because on the Liberty Media is is. Serious would represent about 70% opera of the operating earnings that the economy. On that isn't a lot more cash stated they consolidate the other half of it. And the question is what do you do in this whose loans made clear he's going after the cable companies and cable deal so it's been a big question of course is now this is just an intricate. The first step in what's going to be along progress saying if you're -- serious -- getting a battle for us to be of any large companies. But few prospects which is not a done deal yet mole. Why are you looking -- exactly how well it is serious shelled out. You have. The deepest sympathies and happy years -- And we've got it will breaking --

Breakingviews: Malone cannot be Sirius

Monday, Jan 06, 2014 - 03:03

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