Warren Buffett, CEO of Berkshire Hathaway
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Berkshire Hathaway bought 5.3 million class A shares of Liberty SiriusXM Group , one of the three tracking stocks for John Malone’s Liberty Media , raising its stake in the tracker to 20.2 million shares.
Warren Buffett’s Berkshire (ticker: BRK.A and BRK.B), bought the additional shares of Liberty SiriusXM (LSXMA) on Monday for an average price of $50.02 a share, or $267 million. Berkshire also holds 43 million shares of Liberty SiriusXM’s nonvoting stock (LSXMK). Berkshire’s total stake in Liberty SiriusXM is nearly 20%.
The Berkshire purchase looks well-timed because Liberty SiriusXM class A shares were up $1.40, or 2.7%, to $53.06 in early trading Thursday after Liberty reported financial results earlier today.
A highlight of the release appears to be that Liberty SiriusXM executed on Wednesday a tax-free exchange of 5.3 million of its class A shares for 43.7 million shares of Sirius XM Holdings (SIRI), which will take Liberty Media’s ownership of the satellite radio company to about 80.2%. The Sirius stake is the largest asset attributed to the Liberty SiriusXM at more than $20 billion.
With Liberty’s stake above 80%, all future dividends and other distributions to Liberty SiriusXM Group from Sirius will be tax-free, a favorable development for Liberty. Sirius recently raised its quarterly dividend by 50%, to roughly 2.2 cents a share.
Investors in both the Liberty SiriusXM and Sirius have been waiting for Liberty’s ownership to hit that 80% threshold for several years as Sirius has steadily bought back stock, lifting Liberty’s percentage stake. Sirius stock is up 15 cents, or 2.3%, to $6.62 in early trading Thursday.
Write to Andrew Bary at [email protected]
