Is A Fight On For Control Of Sirius XM?
April 2, 2012 at 2:51 AM (PT)
THE WALL STREET JOURNAL reports SIRIUS XM RADIO "is trying to block what could be the first move by LIBERTY MEDIA CORP. to gain control of the satellite broadcaster. LIBERTY, which has preferred stock convertible into 40% of SIRIUS shares, has asked the FEDERAL COMMUNICATIONS COMMISSION for permission to take 'de facto' control of the satellite broadcaster, SIRIUS revealed in an FCC filing on FRIDAY."
Industry insiders see LIBERTY as considering a move to acquire 50% of the satcaster.
In 2009, SIRIUS XM borrowed several hundred million dollars from LIBERTY. At that time, LIBERTY was asked if it had acquired "de facto" control of the SIRIUS XM. THE WSJ notes "LIBERTY said it hadn't acquired de facto control, pointing to an agreement it struck with SIRIUS. That agreement prevented LIBERTY from increasing its stake above 49.9% for three years, and from taking other actions such as merging SIRIUS with another company or trying to "influence or control' the company's management or board."
Those three years have expired, as of MARCH 6th.
SIRIUS XM wrote in its FCC filing that the MARCH 6th expiration "does not result in a de facto transfer of control." SIRIUS XM also wrote that while LIBERTY has a "substantial minority interest" it can only designate five of the board's 13 members.