Canaccord Genuity Doesn't See a Liberty Media (LMCA) Takeover of SIRIUS XM Radio (SIRI)

April 3, 2012 8:40 AM EDT
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Canaccord Genuity comments on Liberty Media (NASDAQ: LMCA) and speculation about an SIRIUS XM Radio (NASDAQ: SIRI) takeout.

While share of SIRI have been up 7% over the past two session on renewed expectation that LMCA will buy out the company, the firm doesn't think this will happen.

"We do not think this is the case because LMCA can monetize its stake without increasing it," analyst Thomas Eagan states. "Moreover, we'd be surprised if LMCA spent $1.5bn for an additional 10% after getting 40% for less than half that."

A potential Liberty spin-out of its 40% stake in SIRI would help it monetize the investment. "Liberty could comply with Reverse Morris Trust requirements by adding True Position, SIRI debt and cash to the spin to net to 50.1%+ of the SIRI newco."

The firm maintained their Buy rating and $101 price target on LMCA.

For an analyst ratings summary and ratings history on Liberty Media click here. For more ratings news on Liberty Media click here.

Shares of Liberty Media closed at $90.17 yesterday.

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