Barclays on U.S. Cable & Satellite Communications: Delaware Verdict Clears the Way
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Today's Overall Ratings:
Up: 7 | Down: 5 | New: 23
Rating Summary:
7 Buy, 1 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 7 | Down: 5 | New: 23
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Barclays on U.S. Cable & Satellite Communications: Delaware Verdict Clears the Way
Barclays analyst, James M. Ratcliffe, said, "As we had expected, the Delaware court decision in favor of Liberty has been upheld on appeal, clearing the way for the split of LSTZA/LCAPA from Liberty Interactive (Nasdaq: LINTA). We view this as a positive for Liberty Starz (Nasdaq: LSTZA) and (to a lesser extent) for Liberty Capital (Nasdaq: LCAPA). We reiterate our Ovreweight on LSTZA, given the potential for capital structure improvement (facilitated by the split), better MSO relationships, and over the top relationship upside. We also retain our Equalweight on LCAPA, where performance and valuation continue to be driven by Sirius (Nasdaq: SIRI)."
"Split Frees LSTZA To Repurchase Stock. Once the split is complete, we expect Liberty to begin to repurchase LSTZA shares, although we don't expect LSTZA to come close to management's expressed ideal leverage of 3x for the foreseeable future. We are modeling $500MM/year in share buybacks, beginning in 4Q11E, which would still leave LSTZA with $700MM in net cash by YE 2012E."
"With the split approved, Liberty Can Focus on LCAPA and LSTZA Structure. Now that the split has been approved, we believe Liberty management will focus on the asset mix at LCAPA and LSTZA, with a likely first step the spin of the SIRI stake from LCAPA sometime in 2012E. We don't expect to see a split-off of LSTZA into a standalone company (which would be necessary if the asset were to be sold), at least not for some time, given concerns that divesting both Starz and SIRI could leave the stub Liberty sub-scale, and unable to follow any path other than a wind down."
Barclays analyst, James M. Ratcliffe, said, "As we had expected, the Delaware court decision in favor of Liberty has been upheld on appeal, clearing the way for the split of LSTZA/LCAPA from Liberty Interactive (Nasdaq: LINTA). We view this as a positive for Liberty Starz (Nasdaq: LSTZA) and (to a lesser extent) for Liberty Capital (Nasdaq: LCAPA). We reiterate our Ovreweight on LSTZA, given the potential for capital structure improvement (facilitated by the split), better MSO relationships, and over the top relationship upside. We also retain our Equalweight on LCAPA, where performance and valuation continue to be driven by Sirius (Nasdaq: SIRI)."
"Split Frees LSTZA To Repurchase Stock. Once the split is complete, we expect Liberty to begin to repurchase LSTZA shares, although we don't expect LSTZA to come close to management's expressed ideal leverage of 3x for the foreseeable future. We are modeling $500MM/year in share buybacks, beginning in 4Q11E, which would still leave LSTZA with $700MM in net cash by YE 2012E."
"With the split approved, Liberty Can Focus on LCAPA and LSTZA Structure. Now that the split has been approved, we believe Liberty management will focus on the asset mix at LCAPA and LSTZA, with a likely first step the spin of the SIRI stake from LCAPA sometime in 2012E. We don't expect to see a split-off of LSTZA into a standalone company (which would be necessary if the asset were to be sold), at least not for some time, given concerns that divesting both Starz and SIRI could leave the stub Liberty sub-scale, and unable to follow any path other than a wind down."
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