Liberty Media Increases DIRECTV Stake
Liberty Media made another step towards outright control of DIRECTV today. In a complex transaction, Liberty acquired 78.3 million shares of DIRECTV, street value about $1.98 billion dollars. And they didn’t even use their own money.
Well at least I don’t think they did. According to Liberty, they borrowed the $1.98 billion against a new equity collar on 110 million shares of DIRECTV stock that they already own. So what exactly does that mean?
Well, I’m not really sure, even after reading up on it here and here. But suffice it to say, John Malone and the gang over at Liberty seem to have more than a passing interest in DIRECTV.
The purchase brings Liberty’s overall stake in DIRECTV to 48%, just a tad under that magical 50% plus one number that would represent controlling interest. So what will be Liberty’s next move with DIRECTV?
Liberty was coy at the Bear Stearns Media Conference, held in March. At that time, investor relations head John Orr said Liberty might go either way with Direct TV – either reducing or increasing their stake. With today’s move – it looks like Liberty is increasing their bet on the future of the nations leading satellite television provider.
by Written by Michael Brix on April 3, 2008
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tagged as DIRECTV, equity collar, john malone, liberty media in DIRECTV
