Sirius XM’s Independence DWINDLES
Sirius XM Radio’s (NASDAQ:SIRI) days as an independent company may be numbered.
Liberty Media (NASDAQ:LMCA), which acquired a 40 percent stake in the Sirius XM in 2009, has recently taken steps to take control of the satellite radio provider. Liberty also owns stakes in Barnes & Noble (NYSE:BKS), concert promoter Live Nation Entertainment (NYSE:LYV), and television company Discovery Communications (NASDAQ:DISCA).
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Liberty CEO Greg Maffei said to investors at the Bank of America Merill Lynch conference in California that Sirius’s more than 22.9 million subscribers could one day make up the core of Liberty.
In an August 16 filing with the Federal Communications Commission, Colorado-based Liberty disclosed its plans to increase its stake to 50 percent. Yesterday, a regulatory filing showed that the company had purchased 30.9 million more shares in Sirius, which brought its holdings to 49 percent. As of this week, the FCC has not responded to Liberty’s application to take full control of Sirius XM.
Comments made by Sirius CEO Mel Karmazin at the same conference have hinted toward the end of his company’s independence. Karmazin told investors he may leave the company when his contract expires at the end of the year. “My instincts today are that Liberty does not need me at the company,” he said.
Liberty got its stake in Sirius after providing a $530 million dollar loan to stave off bankruptcy. Under the terms of the agreement, Chairman John Malone was barred from any attempts to take control of the company for three years. Those three years are now over. Sirius’s fortunes look much better than they did in 2009, with shares up 30 percent this year.
Malone has said he intends Sirius to be independent once more; once it gains control of the company, Liberty could split the satellite radio provider off as a separate entity.
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