By David Benoit

John Malone and Liberty Media are mobilizing cash for the takeover attempt of the rest of Sirius XM Radio.

The media giant is spinning out its Starz premium-cable channel as way to bring in cash for its satellite radio hopes.

Libertys CEO Greg Maffei says the move will permit us to better pursue our strategic objectives, including creating two currencies that could be used for acquisitions; and create significant liquidity at Liberty Media, which preserves all our options with respect to SiriusXM and Live Nation.

The mechanism will be a dividend of shares of the new company paid to holders of Liberty. Starz will hold $1.5 billion in debt and an undetermined amount of cash, as well as the assets of the cable network.

It is the latest move by Liberty, controlled by the billionaire Malone, who has a history of maneuvering around his media assets and has been public in his quest to land the rest of Sirius he doesnt control.

From Dow Jones colleagues William Launder and Saabira Chaudhuri:

In the past few months, Sirius and Liberty have battled publicly over which company should control the satellite radio company.

Liberty gave Sirius a lifeline in early 2009 with several hundred million dollars in loans; in exchange, Liberty got preferred shares equivalent to a 40% stake in the company. Liberty has since increased the stake to more than 46% and asked the Federal Communications Commission for permission to exercise effective control. Sirius has opposed the FCC application, arguing Liberty hasnt taken concrete steps to get control.

The split will also set up Liberty to further pursue its ownership in concert-promotion giant Live Nation Entertainment Inc., in which it currently owns a 26% stake.

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Liberty Media Spinning Off Starz to Go After Satellites