Sirius XM majority stakeholder Liberty Media Corp announced its intentions to purchase the satellite radio company last week, offering about $10.6 billion at a rate of $3.68 per share. The deal would involve creating a new class of stock called Series C, adding 0.076 per share to give the company a total market value of around $23 billion.
In response, the satellite radio company’s stock jumped today. It’s currently at $3.82 per share, which puts Sirius XM’s value at about five percent over what Liberty is offering. Sirius board members are expected to counter with a higher offer following the company’s latest market rally, while also pointing to rising shares over the past few years thanks to the recovering auto industry.
Liberty is also expected to make a bid for Time Warner Capable through one of its holdings, Charter Communications Inc. The Sirius XM deal could help finance this second buy out.