John Malone’s Liberty Media Corp (Capital) (NASDAQ:LMCA), on Thursday, got approval from the Federal Communications Commission (FCC) to take control of Sirius XM Radio Inc (NASDAQ:SIRI). The FCC ruled that the takeover of Sirius XM by Liberty Media is in the public interest and does not hurt industry competition.
Douglas County-based Liberty Media Corp (Capital) (NASDAQ:LMCA), was keen on acquiring the growing 23 million-subscriber radio service, since it bought a 40 percent stake in the business and saved the radio firm from the bankruptcy with a $535 million loan. John Malone’s Liberty Media Corp has been trying, since last year, to gain full control, after it got dissatisfied with the company’s pace of buying back its own shares, and in developing new services and technology.
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In May, the FCC rejected a takeover attempt by Liberty Media over Sirius XM’s transmission licenses, claiming the company should own more shares before going for full control. Then in August, after gaining 49.5 percent stock ownership of New York City-based Sirius XM Radio Inc (NASDAQ:SIRI), Liberty Media applied again for control of ground stations and transmission licenses.
The FCC said in today’s order that in the filing Liberty pledged it will convert preferred securities and buy enough shares to own more than 50 percent of Sirius common stock within 60 days of gaining approval for the license transfers. In July, Malone revealed that he plans to spin off Sirius after gaining full control.
“There is no question eventually Sirius XM Radio Inc (NASDAQ:SIRI) will be an independent company,” he said. “The question is, in what time frame and in what circumstances?”
The New-York based Sirius with 23.4 million subscribers, was the most profitable company in 2010, after posting losses for about a decade. Sirius satellite radios are installed in about two-thirds of all new automobiles.
The approval from FCC comes about a month before the announced departure of Sirius XM CEO, Mel Karmazin, who revealed hiss intentions, in late 2012, of stepping down to make way for Liberty-appointed management. Liberty Media CEO and Sirius XM board member, Greg Maffei is the most likely candidtate to succeed Karmazin.
Liberty Media Corp (Capital) (NASDAQ:LMCA) stocks gained 5 cents to $119.84 at the close in New York, while Sirius shares jumped 6 cents, or 2 percent, to $3.08.