Sirius XM shareholder City of Miami Police Relief and Pension Fund lost a bid 8/22 to stop Liberty Media from seeking to acquire a controlling stake in the satcaster after Delaware Chancery Court Judge Leo Strine refused to bar Liberty Media Chairman John Malone from adding to his 48% Sirius stake.
The shareholders’ request for an injunction to keep Malone from buying more Sirius shares “is a bit of a stretch,” the judge said at a hearing in Wilmington. “I’m not going to rule by the seat of my pants on this.”
However, Strine did say he would hear expedited motions to decide whether the Sirius investors’ case should proceed within the next month, reported Bloomberg.
The pension fund alleged that the provisions that prohibit SiriusXM’s board from fighting off a Liberty takeover are a breach of its fiduciary duties. The provisions prevent the directors from taking any action to hurt Liberty’s ability to continue acquiring Sirius stock, “regardless of whether Liberty’s acquisition poses a threat to Sirius’ non-Liberty shareholders,” according to the lawsuit reported on by Reuters/CNBC.
“Put simply, a board cannot tie its own hands, or the hands of successor boards, in ways that constitute an abdication of their fiduciary duties,” it said.
The police fund is seeking compensatory damages and asks Liberty to stop buying Sirius shares on the open market. The pension fund is also seeking class action status in the case against Sirius’ board.