Greg Maffei said Thursday that Sirius XM may eventually be spun off. This has led to much speculation. One needs only to look at Liberty’s history and recent events regarding Liberty and Direct TV (DTV) in which Direct TV was joined with the broadcasting and programming assets of Liberty Media’s Liberty Entertainment unit and spun off. The move combines the home satellite TV provider with Liberty’s programming units, including Liberty Sports, the Game Show Network and Fun Technologies. Through the spin off, the new entity will assume $2 billion of Liberty’s debt and $30 million in cash. DirecTV will also make $650 million in Liberty loan payments.
“This transaction clarifies DirecTV’s capital structure, reduces its shares outstanding, eliminates stock overhang and arbitrage issues, and provides DirecTV with strategic content businesses,” said Greg Maffei, Liberty president and CEO. “And this transaction offers value to Liberty’s shareholders by eliminating the discount in our tracking stock structure and allowing them to continue to participate directly in the strong performance of DirecTV.”
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