New Sirius Deal Even Worse Than Old Sirius Deal

Here is the bit about the Sirius offer:

In light of the tracking stock distribution, our offer for SiriusXM is no longer applicable. Depending on market conditions, we look forward to further discussions with the SiriusXM Special Committee. We remain enthusiastic owners of 53% of SiriusXM.

Sirius will also complete its repurchase of $500 million of its own stock from Liberty, and the Liberty Media Group would assume ownership of the company’s stake in Sirius, among other assets.

The two-tracking stock setup that Liberty has selected will issue one new share of Liberty Media tracking stock for each share of Series A and Series B and four shares of the new Liberty Broadband tracking stock for each share of Liberty Media they hold. Stockholders also will receive a subscription right to acquire one additional series A or series B share of Liberty Broadband tracking stock for every five shares of series A or five shares of series B Liberty Broadband tracking stock they receive in the distribution.

So ends the $3.68 per share offer Liberty had on the table for the 48% of Sirius it does not own. And then things get worse for Sirius shareholders.

Now that Liberty has been cut out of an acquisition of Time Warner Cable Inc. (NYSE: TWC), Liberty does not need the cash flow generated by Sirius. Liberty would be happy to see shares of Sirius decline so that the larger firm could pick up the remaining shares of the satellite radio company for even less than its original paltry offer. And if Sirius shares do not sink on their own, there is always the subscription rights, which give an investor access to Sirius without actually having to buy the shares.

Shares of Sirius were trading up about 3.8% Friday morning, at $3.49 in a 52-week range of $2.95 to $4.18.

Class A shares of Liberty Media were trading up nearly 9%, at $137.31 in a 52-week range of $107.07 to $159.33.