Liberty Media’s transfer of de jure control of Sirius XM is...
Liberty Media’s transfer of de jure control of Sirius XM is secure from any regulatory challenge, analysts and attorneys said. The FCC’s order issued Thursday, which granted Liberty permission to take de jure control, notes Liberty’s intent to own more…
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than 50 percent of Sirius within 60 days of commission consent (CD Jan 4 p9). With the FCC ruling, “it’s pretty straightforward and looks to be a done deal,” said Jeff Silva, analyst with Medley Global Advisors. “The only real unknown is when, in the next 60 days, Liberty will gain hard control of Sirius.” Liberty is likely to do so sooner rather than later, he said. The next step for Liberty Chairman John Malone is to figure out how to achieve maximum value for Sirius in a very tax-efficient way, he added. Sirius can buy back shares, other than Liberty shares, in the market, said independent analyst Tim Farrar. If Sirius buys back shares, “then that will be a way to get Liberty to the majority,” which would require less capital from Liberty, he said. “Liberty may be able to influence Sirius to follow that path with Mel Karmazin gone.” James Meyer became Sirius CEO after Mel Karmazin resigned last month (CD Dec 20 p21). Liberty completing its transfer is certain, Farrar added: “It’s just a question of whether they'll do it in a way where they have to put up more capital to get to that majority stake or whether Sirius does some buyback of its own and allows Liberty to get to a majority.” It appears the FCC approval is sufficient, a communications attorney said. “The commission signed off and said ‘you guys are good to go, just buy your shares and tell us about it after the fact,'” he said.