Todor Pichurov

Sirius XM Radio, Inc. (NASDAQ:SIRI) Slated to Pass the Wheel to Liberty Media Group, Inc.

by Todor Pichurov August 23, 2012
6SIRI_chart.pngSpeculation around Sirius XM Radio, Inc. (NASDAQ:SIRI, SIRI message board) and its romance with Liberty Media Group seems to have finally come to an end.

Sirius recently filed a formal 8-K, stating that Liberty Media filed an application for transfer of de jure control of SIRI. The quoted parts of the application inform of Liberty's plans to buy sufficient shares and convert its preferred stock so that it acquires more than 50% of Sirius, effectively gaining control.

There is some discontent among Sirius shareholders who refer to the acquisition as a "creeping takeover" and even took their complaints to court. However, Delaware Judge Leo Strein denied the bid to prevent the furthering of Liberty Media's 48% of Sirius ownership.

Liberty Media bailed SIRI from bankruptcy in 2009 by loaning $530 million to the satellite radio broadcaster. The loan landed Liberty CEO John Malone a large slice of SIRI but the terms of the 2009 agreement barred him from acquiring the controlling stake of Sirius for 3 years. Now that this period has ended, it looks like Malone is moving in to buy the 3% he needs.

Sirius posted very appealing Q2 results, boosting year-over-year revenue for the period by more than $90 million while reining period operating expense growth to just about $38 million. Wall Street also has faith in SIRI with Q3 EPS projections shifting up a cent to $0.03 over the last month.

Some feel uncertain about how Liberty will steer SIRI in terms of general financial policies. Yet, only the future can tell what the exact impact of having Liberty in the controlling spot will be.

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