One of the challenges of a Charter-Time Warner Cable tie-up, is that Time Warner Cable is much larger than Charter, according to analysts. Charter, the No. 4 cable operator, has a market capitalization of around $13.6 billion, much smaller than Time Warner Cable's nearly $38 billion market value.
Liberty executives have so far said they prefer to use Charter as its agent of cable consolidation, but it has not ruled out involving Liberty in a transaction.
Liberty's all-stock buyout offer for Sirius XM could be worth more than $10 billion, given that minority shareholders control about 46 percent of the company, which has a market capitalization of $21.5 billion.
Liberty Media became Sirius's majority owner in January 2013 after U.S. regulators gave it the green light to take control of the satellite radio operator. Malone, Liberty's chairman, is notorious for creating complicated, tax-efficient deals involving stock.
Liberty said on Friday each share of Sirius common stock would be converted into 0.0760 of a new share of Liberty's Series C common stock which has no voting right, the equivalent of $3.68 a share.
That figure is just barely above Sirius XM's closing price of $3.57 on Friday and Liberty Chief Executive Officer Greg Maffei said a special committee of independent board members would be formed at Sirius XM to look at the offer and that it might negotiate a higher price with Liberty. The deal is also subject to shareholder approval.
(Watch: Will Apple & Google kill Sirius?)
Liberty said following completion of the deal, Sirius's public shareholders would own about 39 percent of Liberty's outstanding common stock.
In 2009, Liberty became the largest shareholder in Sirius after it floated the company a $530 million loan to help it avoid bankruptcy. Terms of that deal allowed for Liberty to convert the loan into preferred shares.
The financially strapped company Liberty rescued in 2009 is in much stronger shape five years later and has seen its shares skyrocket more than 2,600 percent over the past five years.
It has gained a key foothold in the vehicles market, which is seeing a rebound, with its radios in 70 percent of new cars in the United States.