Market Overview

Liberty Media's Bid For SiriusXM 'Ludicrous'

Consumer advocate Ralph Nader said that Liberty Media's (NASDAQ: LMCA) offer on January 3 to acquire Sirius XM Radio (NASDAQ: SIRI) for $3.68 a share was “ludicrous.”

The former presidential candidate is speaking up as he is personally a shareholder of Sirius XM.

“I am sure that I along with other shareholders in Sirius XM will be interested in a legal challenge to John Malone's company for lowballing Sirius XM's shareholder value,” Nader said in a statement on January 6.

Nader described Sirius XM as “a fast-growing company with bright indicators and registers four stars by Standard & Poor's, which recommends a buy.”

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Shares of Sirius XM closed on January 6 at $3.83 a share. A couple of months ago, shares were trading north of $4.00.

On January 2, analysts at Evercore Research upgraded shares to Overweight with a 12-month price target of $4.50.

Liberty Media loaned Sirius XM money in exchange for a 40 percent stake of the company back in 2009. Liberty Media currently owns nearly 53 percent of Sirius XM valued at $10 billion.

Liberty's offer requires a majority approval from Sirius' minority stake, that is the 47 percent not held by Liberty.

Nader called out famed activist investor Carl Icahn to “take notice and interest.”

It is not clear at this time if Icahn has any interest in pursuing an activist war against SiriusXM to extract maximum value for shareholders.

Sarbit Advisory Services owns 27 million shares of Sirius XM, roughly 1 percent of the minority stake. The firm's chief investment officer, Larry Sarbit, said he would not approve the current deal.

“I think Liberty sees what we see: a free cash flow machine,” Sarbit told Barron's on January 6. “They're trying to pick it up at a bargain price.”

Sarbit thinks that shares would be trading in between $6 and $7 by 2018.

Posted-In: Carl Icahn John Malone Larry Sarbit liberty media Liberty Media bid Sirius XMNews Analyst Ratings Tech Best of Benzinga

 

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