Just when everyone thought Sirius XM Radio was headed for bankruptcy, John Malone and Liberty Media come in to save the company with a significant investment.
Sirius XM Radio won’t have to file for bankruptcy after Liberty Media Corp. agreed to invest $530 million to rescue the satellite radio broadcaster, the companies said Tuesday.
Engelwood, Colo.-based Liberty, the media and entertainment company founded by John Malone, will immediately loan Sirius XM $280 million, about $171 million of which will to pay off debt Sirius had coming due this week.
A second round of $250 million from Liberty (NASDAQ: LCAPA) will also be available to Sirius XM to help it pay its debts and ward off a potential takeover of Sirius by Charlie Ergen’s Dish Network Corp., the Englewood, Colo.-based satellite TV company.
In return for the investment in Sirius XM, Liberty will own 12.5 million shares of preferred stock in Sirius XM (NASDAQ: SIRI), which Liberty can convert into common stock.
That would give Liberty a 40 percent ownership stake in the radio company.
I love having satellite radio and it appears to be a solid business. It just had a terrible balance sheet with way too much debt. Howard Stern can now breathe a little easier.
It is with a heavy heart that we must suspend the Ruby Tuesday feature indefinitely. But fret not, gentle readers. We hope to resurrect the series in the not-too-distant future. Until then, enjoy that Lilac Time track while you can, because it’s coming down a week from now. D’oh.
Well, the speculation is over. XM and Sirius satellite radio are going to merge into one company. The name of that company is as yet undetermined, and many feel the merger will meet with various resistance from the FCC and other factions. Well, it was fun while it lasted. Hopefully it will continue to be, but only time till tell.