Barrington stays Outperform on Sirius as Liberty bids to solve structural issue

Barrington reaffirms an Outperform rating on shares of Sirius XM (SIRI) after the company acknowledged that its special committee of independent directors received a non-binding proposal from Liberty Media Corporation that outlines a potential offer to create a new company with only one class of stock. The attempt to bridge the gap between the controlling interest held by Liberty via several classes of tracking stock with the publicly traded Sirius XM shares “addresses several thorny issues,” the analyst tells investors. If the proposed terms were to take effect, the owners of the various tracking stocks would effectively hold roughly 84% of “Newco,” while the current owners of Sirius XM would collectively own the 16% balance, the analyst noted.