Originally Posted by
user34615145
Here's another great exchange and little nugget of information from the Q&A portion of the Liberty call:
Bart Crockett - FBR Capital Markets & Co.
Okay. Thanks for taking the question. I was wanting to ask about the ownership, the creeping ownership at SIRI, as you're at 59%, I think you were at 57% last quarter. In a year or so, you'll be up pushing 70% at this pace. Now at what point do you think, Greg, it becomes incumbent upon SIRI to maybe stop buying back shares or stop buying back shares as your ownership accretes? And can you walk through some scenarios that tell us how we would get out of that situation once we get there?
Gregory Maffei - President & CEO
Well, I think that's one that you're going to have to address more to the independent directors and counsel at SIRI. It's not our challenge, per se. I would state that sheer math would say, from Liberty's perspective, if they wanted to pay a big one-time special cash dividend because they got too high on the buyback and remembering our discount at LMC, we wouldn't probably complain because even after the tax at the moment that we would pay on that kind of a distribution, we'd be effective at buying our own stock back and still be able to capture more value. So I think are other things they can do. Look, they're a cash flow generating machine. There are other ways they can deliver value to their shareholders at some point, if our ownership gets too high, because of liquidity concerns or other concerns.
Am I correct in reading this as Maffei saying essentially "look if they want to keep buying their shares back an that increases our stake, then who am I to stop them?"
I think certainly from Maffei's perspective, if they can increase their stake from approx. 60% to 70% in the next year (assuming Crockett's math is correct) by just sitting back and letting SIRI buy back it's own stock on the open market, then it may pay him to wait a little while longer before he were to float another tender offer....as long as the share price were to remain muted.