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Sirius/XM/WorldSpace

M

Mufallata Spread

a Debt Free International Sat Radio Corporation?

"One of Sirius XM’s largest shareholders notes that the institutional accumulation may be indicative of something going on behind closed doors. He stated that “something is going on here, we just don’t know what it is.”

Liberty Capital recently created Liberty Satellite Radio, in which it transferred its newly acquired Worldspace assets. Through this subsidiary, Liberty could buy Sirius XM, and a new parent company would emerge. Shareholders would likely be bought out for cash or a stake in Liberty Capital. The preferred stake of Liberty could then be spun off to the new Satellite Radio company, avoiding a taxable event. An IPO of a debt free, cash flow generating Liberty Satellite Radio could then follow."


http://satwaves.com/blog/2010/02/19/siri-potential-buyout-of-sirius-xm-by-liberty-capital/
 
I've read this in many places and I still don't understand how you arrive at a debt free company. That's a lot of debt, and Liberty isn't going to buy it along with all the assets. The rise in stock price helps, and that's one way to offset debt. Get the stockholders to buy your debt. But I think Sirius still has a lot of work to do in terms of consolidating facilities. Plus some big contracts with Stern and Oprah are due.
 
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