As I stated in a previous article several weeks ago entitled: “Sirius XM Radio (NASDAQ: SIRI) and Liberty (NASDAQ: LCAPA, LMDIA, LINTA) Pursue Other Markets”, it appears things are heating up for the future plans of the Satellite Radio Company. On November 13th Liberty Global, another of John Malone’s diverse holdings issued the following Press Release titled “Liberty Global to Acquire Unity Media.“
In the release it states the following points of interest:
1) November 13, 2009: Liberty Global, Inc. (“Liberty Global,” “LGI,” or the “Company”) (NASDAQ: LBTYA, LBTYB and LBTYK) today announced that it has entered into a share purchase agreement with Unity Media S.C.A. to acquire all of the issued and outstanding capital stock of Unitymedia GmbH (“Unitymedia”), Germany’s second largest cable operator.
2) Liberty Global will acquire 100% of the shares of Unitymedia for an equity purchase price of €2.0 billion ($3.0 billion), from its parent, which is owned by a group of shareholders led by BC Partners and Apollo.
3) Liberty Global is being advised by Goldman Sachs in connection with this acquisition.
Looking at things a bit further, we know that Liberty is in discussions as well with regard to Worldspace (OTC BB: WRSPQ) on acquiring their hard assets, this after buying up their debt. On the Worldspace website it states the following:
“1worldspace is the first and only company with rights to the world’s globally allocated spectrum for digital satellite radio. Its broadcast footprint covers over 130 countries including India and China, all of Africa and the Middle East and most of Western Europe – an area that includes five billion people and more than 300 million automobiles. Its two fully operational satellites and ground infrastructure are based on proprietary and patented technology.” (http://www.1worldspace.com/corporate/)
In 2006 Worldspace Italia received approval from the Italian Ministry of Communications to launch a subscription based satellite radio service in Italy utilizing 12.5 MHz of the L Band frequency spectrum, which is the only frequency spectrum band harmonized for satellite radio over Europe. In January 2007, Worldspace signed an agreement with Telecom Italia to design and deploy a terrestrial repeater network through Italy
In 2008, Worldspace signed a contract with Fraunhofer Institute for Integrated Circuits (IIS), part of Fraunhofer Gesellschaft,(The largest organization for applied research in Europe. It includes more than 80 research units, including 60 Fraunhofer Institutes, at different locations in Germany. The majority of the 17, 000 staff are qualified scientists and engineers working under a € 1.5 billion annual research budget .Of this sum, 1.3 billion euros is generated through contract research. Two thirds of the research revenue is derived from contracts with industry and from publicly financed research projects. Only one third is contributed by the German federal and Länder governments in the form of institutional funding .They have research centers and representative offices in Europe, USA, Asia and in the Middle East.) to develop a receiver reference design or engineering blueprint for the European market. The design was already in development and undergoing testing prior to Worldspace going into bankruptcy.
From this information, we can see I think pretty clearly that any talk of Sirius XM Global expansion must include Liberty and John Malone’s deep pockets. While Sirius XM does possess some very unique content and talent, they are still growing and not nearly in any sort of position to acquire the infrastructure and licensing it would take to leverage their content across the Globe. Liberty still very much remains the exact partner and ally that Sirius XM needs to have in order for the possibility of this scenario to flourish, or even be a remote possibility. There are some engineering issues clearly for the companies to work through, as well as licensing and spectrum issues which must be dealt with. Liberty has been dealing with those issues through Liberty Global and other Liberty companies for many years already, and their knowledge base in that area should not be taken lightly.
Another interesting piece of news from last year;
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Also of note is Liberty’s recently announced stake in VIASAT (NASDAQ: VSAT) through VIASAT’s acquisition of Wildblue communications:”Liberty Media to Appoint Representative to ViaSat Board“
At closing, WildBlue shareholders are expected to have the right to nominate one representative to the ViaSat board of directors and have agreed to allow Liberty Media, who is expected to become a significant shareholder of ViaSat as part of this transaction, to select the representative.
“Our longstanding investment in WildBlue reflects our keen interest in new broadband access and media delivery networks of all types,” said Mark Carleton of Liberty Media, who also is chairman of WildBlue. “In just a few years, WildBlue established a demand for its service and rapidly grew to over 400,000 subscribers. We believe that combining the service and technology companies, expanding the market applications, and adding the timely quantum leap in network capacity expected by the ViaSat-1 satellite, establishes an even more competitive platform for further growth and value creation for shareholders.”
You can read the entire press release here:http://www.viasat.com/news/viasat-acquire-wildblue-communications- which was recently given a huge regulatory reprieve with this announcement:
“ViaSat and WildBlue Communications have been granted early termination by the Federal Trade Commission and the Antitrust Division of the Department of Justice of the mandatory waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (“HSR”), in connection with the previously announced ViaSat acquisition of WildBlue.” Also: “Completion of the proposed acquisition remains subject to receipt of other regulatory approvals and the satisfaction of the other closing conditions set forth in the merger agreement. The parties continue to expect the transaction to close in the fourth quarter of ViaSat’s 2010 fiscal year, which ends April 2, 2010.”
Full press release at the following link:http://www.viasat.com/news/early-termination-hsr-waiting-period-connection-proposed-acquisition-wildblue-communications
It is possible that all these recent acquisition events have absolutely nothing to do with the combination of Liberty and Sirius XM. They could all be business as usual and have impacts on the Liberty businesses which are involved with them individually only, but given the history of Liberty as a company, one has good reason to think that this is all somehow interconnected. Sirius XM may well find itself subscribers via internet in Europe very soon, followed eventually by subscribers via automobile as in the United States. To that end, Liberty is the key and has the door opening ability and network of contacts to make it all come true. If it does play out, Sirius XM shareholders will be holding stock that is much more valuable than it was when they originally invested in it. Certainly, Sirius XM has much more value as a global media enterprise, than its current US based limited model represents.
