Sirius XM deal would benefit holders longer term, says Wells Fargo

Wells Fargo keeps an Equal Weight rating on Sirius XM (SIRI) after Liberty Media made a proposal to combine its Liberty SiriusXM trackers with Sirius XM “in a much-awaited process.” The analyst thinks agreeing to a deal will remove a key overhang and should benefit Sirius XM shareholders longer term “via a cleaner structure and index inclusion. While largely expected, investors have struggled to coalesce around an expectation for such a combo resulting in increased volatility in Sirius XM of late, the analyst tells investors in a research note. Wells says Liberty may accept a counter-proposal from the special committee with better terms for Sirius XM, such as a higher dividend, lower exchange ratio or more cash/less debt when combined. However, investors could view this as a mostly final offer given it has been expected from Liberty for some time, adds Wells.