What is Liberty Media Planning for Sirius?
Liberty Media (NASDAQ:LMCA) chairman John Malone said his company’s attempts to take control of Sirius XM Radio (NASDAQ:SIRI) are likely to eventually lead to a spinoff of the satellite-radio. Malone said on Wednesday that spinning off Sirius would be in line with Liberty’s tradition of making its properties, such as DirecTV (NASDAQ:DTV) and Liberty Global (NASDAQ:LBTY), independent publicly held companies.
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“If I’m in control, I like to have separate companies, run independently, with public shareholders investing in that business,” Malone said, according to Bloomberg. “There is no question eventually Sirius will be an independent company. The question is, in what time frame and in what circumstances?”
Liberty and Sirius have been in a tangle over the operating control of the latter for the past several months. Liberty, which stays just short of a 50 percent stake in Sirius, had appealed to the U.S. Federal Communications Commission earlier this year to get control. Sirius, led by chief executive Mel Karmazin, resisted and managed to hold off the overture. Karmazin has said that he will not give up control of Sirius without securing a premium from Liberty for his shareholders.
However, Liberty, which loaned Sirius $530 million in 2009 to help it from going bankrupt in return for shares that it is now using to wrest control, has now resubmitted its petition to the FCC. “We’ve asked (the FCC) to affirm we have de facto control,” Malone said. “Once they do that, there is no barrier to us having actual, hard control.”
Malone said that if anyone was going to get a premium in the deal, it would be he. “There are three parties in this deal — Sirius and its shareholders, Liberty and its shareholders, and there’s me personally because I am the controlling shareholder in Liberty,” he said. “So when you ask yourself, ‘Should there be a control premium and if there is one, who should get it,’ don’t forget about me.”
The chairman also said that Liberty Media chief executive officer Greg Maffei was not in the running to take over as Sirius CEO. “Greg’s not an operating man,” Malone said. There are plenty of good managers, including inside the company.”