FCC Approves Liberty Takeover of SiriusXM
Liberty Media came closer to its goal of taking control of satellite radio broadcaster SiriusXM this week, with the Federal Communications Commission’s
decision to grant regulatory approval for the acquisition.
Liberty had been waiting for the FCC’s decision since filing the request for approval in August 2012. A previous
application to take control of Sirius XM was rejected by the FCC in May 2012, at the satcaster’s urging, because it didn’t outline a plan that would give it control in sufficient
detail.
In the more recent application, Liberty disclosed that it bought 94.3 million shares in Sirius XM for $243 million in August 2012, giving it a 48% stake in the satcaster, and
intended to buy enough stock to increase its stake to over 50% within 60 days of receiving permission from the FCC.
In September, Liberty disclosed that it had purchased another 31.17 million
additional shares of Sirius XM, which increased its stake in the satcaster from 49.2% to 49.7% and put it on the cusp of majority ownership; the only remaining hurdle was FCC approval.
These moves followed several years of public sparring between Liberty Media chairman John Malone and outgoing SiriusXM boss Mel Karmazin over the fate of the satcaster. Karmazin, who created the
company by merging Sirius with then-rival XM in 2007, fended off several bids for control by Malone, who repeatedly criticized Karmazin’s management.
In October 2012, Karmazin said he would step down from the top spot at SiriusXM by February of this year. However in mid-December Karmazin revealed he was stepping down early. Liberty said he would be replaced by James Meyer, previously the company’s president of sales and operations, who will serve as interim CEO while the company’s board of directors searches for a replacement.
Liberty acquired
considerable leverage over Sirius XM in February 2009, when it invested $530 million in the satcaster, then in financial distress, in return for a 40% stake in the company -- putting Liberty within
range of a takeover. Liberty’s total stake in Sirius XM is now worth over $5 billion.
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