John Malone’s Liberty Media has asked the FCC for approval to take outright control of Sirius XM Radio, noting it plans to raise its stake in the satellite-radio operator above 50%. The request comes after Liberty’s disclosure earlier this week that Liberty, SiriusXM’s largest shareholder, had increased its stake to about 48% from 46.2%.
In a filing 8/17, Liberty said it will “have purchased sufficient shares of Sirius’s common stock and will convert its preferred shares such that the transfer of control will be completed within 60 days of commission consent.”
Raising its stake above 50% and being granted FCC approval to take absolute control opens the way for Liberty to replace Sirius management and spin its Sirius stake off to Liberty shareholders (stated below).
See part of the SEC filing here:
Between August 10 and August 16, 2012, the Reporting Person acquired an aggregate of 94,318,369 shares of Common Stock (the “Purchased Shares”) in open market purchases.
Item 4. Purpose of Transaction
The information contained in Item 4 of the Liberty Schedule 13D is hereby amended and restated in its entirety as follows:
As previously described in Item 6 to the Liberty Schedule 13D, certain restrictions contained in the Investment Agreement, including the standstill provisions, expired on March 6, 2012. On March 20, 2012, the Reporting Person filed applications for consent to transfer of de facto control of the Issuer (the “De Facto Applications”) with the Federal Communications Commission (the “FCC”), which applications were dismissed by the FCC on May 4, 2012 (the “FCC Dismissal”). The FCC dismissed the applications because such applications “are defective with respect to ‘execution’ and ‘other matters of a formal character.’” On May 30, 2012, the Reporting Person filed with the FCC a Petition for Reconsideration of the Dismissal (the “Petition”). On August 17, 2012 the Reporting Person withdrew the Petition and simultaneously filed with the FCC an application for consent to transfer de jure control of the Issuer. The Reporting Person presently intends to (i) acquire beneficial ownership of additional shares of Common Stock that, together with its current beneficial ownership, would represent more than 50% of the outstanding shares of common stock (as calculated pursuant to Rule 13d-3 of the Securities Exchange Act of 1934, as amended), and (ii) assert control over the Issuer upon receiving FCC approval by, among other things, influencing management and taking one or more actions specified in clauses (a) through (j) of Item 4.
The Reporting Person acquired the Purchased Shares and entered into the Forward Contract described in Item 6, because, in each case, it believes that the acquisition of additional shares of Common Stock (with respect to the shares of Common Stock subject to the Forward Contract, as to which the Reporting Person presently intends to elect physical settlement) is consistent with the Reporting Person’s intent to assert control over the Issuer. In addition to providing the Reporting Person with the opportunity to increase its equity interest in the Issuer at an attractive price, the Reporting Person believes that the resulting increase in its equity interest in the Issuer will put the Reporting Person in a better position to enhance the value of its interest in the Issuer for the benefit of the Reporting Person’s shareholders by, among other things, influencing management of the Issuer or pursuing a transaction with or involving the Issuer or the Reporting Person’s interests in the Issuer.
On August 8, 2012, the Reporting Person announced its plan to spin-off to its stockholders a subsidiary that will hold certain businesses, assets and liabilities, of the Reporting Person, including the Reporting Person’s interest in the Issuer. The spin-off is subject to customary closing conditions, and the Reporting Person currently expects to complete the spin-off in late 2012.