Liberty Media Quits SIRIUS XM Buyout Plan - Analyst Blog

Liberty Media Corp. LMCA, which owns 53% of Sirius XM Holdings Inc. SIRI, has called off its plan to buy the rest of the shares of the satellite-radio provider. Meanwhile, Liberty Media announced the formation of two tracking stocks, one to be named as Liberty Media Group while the other will be Liberty Broadband Group.

In Jan 2014, the Liberty Media expressed its desire to take full control of SIRIUS XM Radio, in a deal worth more than $10 billion.

Liberty Media's tracking stock group, Liberty Broadband Group, will comprise the company's 27% stake in Charter Communications, Inc. CHTR, 1% stake in Time Warner Cable Inc. TWC, its subsidiary TruePosition and other investments. The second tracking stock group will consist of the SIRIUS XM stake and interests in other media and entertainment businesses.The present Liberty Media stockholders will gain one Liberty Media Group share and four shares of Liberty Broadband Group along with the right to more cable stocks.

Liberty Media is aggressively pursuing the idea of Charter Communications acquiring Time Warner Cable, the second largest cable MSO (multi service operator) in the U.S. However, Charter Communications has lost to Comcast Corp. in its bid to acquire Time Warner Cable.

In the recently concluded quarter, Liberty Media reported mixed financial results. Earnings came in above the Zacks Consensus Estimate whereas revenues lagged the same. Liberty Media generated $358.6 million of cash from operations compared with $293.2 million in the prior-year quarter. Free cash flow in the reported quarter was $303.27 million against $269.5 million in the year-ago quarter.

Liberty Media currently has a Zacks Rank #3 (Hold).