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Sirius XM Holdings Inc. Message Board

  • tery30938 tery30938 Mar 7, 2014 1:13 AM Flag

    .0760/3 = .025333 x 134.56 = $3.41

    The magic numbers. So if the deal were closed today the value in your account for your SIRI stock turned into LMCC would be $3.41 tomorrow AM. If they up the exchange ratio by 10% that means it would be $3.75. Not a lot of upside from here, for sure.

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    • "So if the deal were closed today the value in your account for your SIRI stock turned into LMCC would be $3.41 tomorrow AM. If they up the exchange ratio by 10% that means it would be $3.75. Not a lot of upside from here, for sure."

      Not necessarily. What if they increased the exchange ratio more modestly, and offered a partial cash offer? So say you get 0.08 for half your SIRI and $4.25 for your other half. Then you might see the shares rally to the "buyout price" (and this time it really would be a price...unlike now...).

      • 1 Reply to sxm_permabull4life
      • Malone will only do a tax-free exchange. Putting one penny of cash into the deal voids that and he will not do. What he might do is provide a "collar" with a minimum $$ guarantee for the value of the SIRI shares at the time of the exchange, where the ratio would have to be ratcheted up if LMCA's stock sagged to the point that the equivalent value was under the minimum.

        Malone already thinks Liberty is undervalued and since that is the only currency he can use it is highly unlikely he will increase the ratio very much. My personal prediction (not worth tea leaves probably) is that the ratio DOES go up 10% at the maximum and then they take it to a vote. It may very well not pass since there are a lot of institutional holders, aside from the more vocal individuals, who are not happy with the valuation. However, the "news" has not been great and the institutions might decide that the $3.75 (or whatever) value is better than risking that the "unleashed" (since the SIRI price has been trading as a slave to LMCA) price drops if the deal breaks given lackluster Q4, vague and disappointing guidance, Apple's getting more closely into bed with all the major car companies (albeit that SIRI's product DOES make a huge difference), and now the sword of Malone hanging over the company with investors not knowing what move he may make in 3, 6 or 12 months to try and suck value out of SIRI again.

    • While I like the conceptual model of Sirius/Liberty joining forces for enhanced shareholder growth over time, I highly doubt the deal "as is" will be the final one. I expect Sirius to get more favorable terms in a counter-offer.

 
SIRI
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