Sirius Cash Can Prop-Up Liberty Media Bid for TWC

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Jan. 6 (Bloomberg) -- Bloomberg News’ Alex Sherman and Bloomberg Industries’ Paul Sweeney explain how Liberty Global’s offer to buy all of Sirius XM could fund a deal for Time Warner Cable on Bloomberg Television’s “Market Makers.”

This about radio or is this the strategy we have seen over and over where he is unlocking the full value of these companies so he can get more cash and more power?


They do like sirius.

They think there is a lot of potential in that business.

There is no doubt this has -- this is a prelude of the time to come in we're doing this deal and we can borrow the asset.

Serious makes a decent amount of money so we can use that cash flow deleveraging that with charter.

How much more capital would liberty have access to?

They are going to have that.

Their leverage target is 2.4%. that can be pumped up to four times.

That is another billion dollar or so loss.

Why did it take so long?

We know that liberty has made a ton of money on its investment.

By waiting so long they are giving away more liberty than they would've had to otherwise.

And they just recently received fcc approval to buy out the remainder.

It is just a question of timing, when they want to make a move.

It is not a coincidence they made the move now.

They made the announcement when they may be looking to do a multibillion-dollar deal.

Is there ever a coincidence when it comes to john malone?

I would say he is the ultimate dealmaker.

I think one of the big things is we have heard from multiple sources that an initial bid will come in at $135 per share.

We can now have more money to attention the kick into a deal.

I think john malone realizes $135 is unrealistic.

They need to kick in more money as that price bumps up.

Given that liberty controls serious-- sirius, can malone operate as if the share exchange is effective?

Can they count on getting that from serious xm?

-- getting that capital from sirius xm?

There is a bit of a time constraint but in no way shape or form will he deal impact the ability of liberty to move on time warner cable whenever they need to make it.

It just gives a more financial flexibility to raise cash so if and when they do bid they will be able to bid for more cash and less stock.

Presumably this deal will close before any deal with time warner would close.

The process is lengthy -- process is likely to be a lengthy process.

, is there any argument to me made that they are not a smart acquisition or that charter is increasing the acquisitions of any time warner?

Time warner is the biggest fish.

They don't have to do time warner cable.

They could do a bunch of smaller acquisitions and gain scale and gain more customers.

But it would be easier and cleaner to go to time warner.

From that standpoint time warner cable is what charter needs in order to get the type of scale that john malone wants.

Does anything change given the fact that it would become liberty?

You will still get your rockabilly station.

Liberty is going to be the majority, our big shareholder.

One of the issues for serious shareholders, they like getting cash back with stocking purchases.

You have to step back and think about -- is this a 24 team trade?

I think both will happen this year.

The bid for time warner cable and that process and almost certainly the deal with sirius.

It may not happen at the shop -- at the stock shipped trade price.

Serious shareholders may get more.

We will see the process probably happen over the next several months.

That will happen in the next month.

Working overtime.

Thank you both so much.

Alex sherman broke the news on

This text has been automatically generated. It may not be 100% accurate.


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