5-31-2012
You know how the saying goes: If at first you don't succeed... Liberty Media is going back to the FCC with a request the commission reconsider its original denial to take control of Sirius. At the time, Liberty had about a 40% stake in the Satellite Radio company. Sirius CEO Mel Karmazin mocked that attempt by saying, "40 is not the new 50." So Liberty wrote a check for $650 million for 302 million more shares, and increased its stake to 45.2%. Yesterday's petition to the FCC asks that Liberty be given "de facto control" of Sirius within 30 days.
In short, if approved, Liberty would be able to control the Sirius board. Liberty saved Sirius from bankruptcy in 2009 with a $530 million loan, it got its original 40 percent stake in return. Liberty agreed not to try to take over the company for three years. That three years ended in March. Speculation in the business trades is that Liberty might spin off its stake and merge Sirius with another company, which would allow the company to save money on taxes. Details on what Liberty would do have not been made public.
In an SEC filing yesterday, Sirius says, "We've been engaged in discussions with Liberty Media to explore possible transactions with respect to its ownership interest in Sirius, although we have not reached agreement with respect to a specific transaction that would be mutually beneficial to both our common and preferred stockholders. There is no assurance that these discussions will result in any specific action or transaction. We do not expect to disclose developments with respect to these discussions."
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