Liberty Media gained majority of the stake of Sirius XM Radio Inc (NASDAQ:SIRI) in January after buying 50 million shares of the company and got regulatory approval for this deal. Malone said in 2012 that Liberty Media Is planning to spin off its Sirius stake, Malone gained a 40 percent equity stake Sirius that is part of the 2009 loan deal. Liberty makes billions of dollars through this deal as the shares of Sirius increased from 16 cents on Feb. 17, 2009, when the loan was announced, to $3.92 today. Like the former Chief Executive Officer Mel Karmazin, Many of Sirius directors, also left Sirius after the takeover.
A judge ruled that billionaire John Malone’s Liberty Media Corp. takes control of Sirius XM Radio Inc (NASDAQ:SIRI) without paying a premium or holding a shareholder vote on the deal, as the investors can’t proceed with a lawsuit claiming company.
Judge of Delaware Chancery Court Leo Strine rejected allegations on Sirius’s board that they improperly allowed Liberty Media to take control of company’s broadcaster in 2009 in exchange for a $530 million loan to allow company to avoid bankruptcy. The judge added a sentence that Investors waited too long to challenge the decision made by directors. Strine said that shareholders of Sirius aren’t entitled to sit on the side and wait until the decision of exchange benefit them if it received.
Sirius announced a partnership with AT&T Inc. (NYSE:T) that connects Nissan Motor Co. (7201) autos in North America in tracking of stolen cars and assistance at roadside. This ruling also comes as because of this partnership.
Lawyers for the City of Miami Police Relief and Pension Fund said in court filings that Malone promised not to acquire a controlling interest in Sirius for next three years under the terms of the loan and the directors’ will not place any anti take over defense.
But when this period expired, under the loan agreement’s terms and Malone was able to buying a controlling interest in Sirius without paying a takeover premium or submitting the acquisition to a shareholder vote and directors said that they still couldn’t place defensive measures.
Strine ordered that Sirius investors should have immediately challenged the board’s decision for agreeing on such loan terms. And directors of the company were correct in considering themselves barred from erecting anti-takeover defenses under the deal.
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