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Thread: If, when, how, and why will Liberty take a controlling stake in SIRI?

  1. #1
    Demian is offline
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    If, when, how, and why will Liberty take a controlling stake in SIRI?

    This issue was touched on towards the end of the last SiriusBuzz radio show....

    This SEC filing says......

    http://investor.sirius.com/secfiling...=930413-09-841

    "The Purchaser has agreed not to acquire more than 49.9% of our outstanding common stock for three years. Certain of the standstill restrictions will cease to apply after two years."
    What are the standstill restrictions that "cease to apply after two years"? I'm confused by that part.....

    It seems that Liberty could be wanting to either be acquiring shares down at this level so that they would be able to take controlling interest in 3 years - or could they possibly partner with another 1 or 2 larger holders of SIRI (such as Apollo) before or after the 3 years are up? Would Liberty and another larger holder be able to theoretically take controlling interest of SIRI now and sell the company on whatever terms they wanted - regardless of what the rest of the common shareholders wanted? Would holders of the rest of the common have any say at all? Can these kinds of decisions be made with just over a 50% controlling interest?

    What other possible motivations could there be for Liberty to take a controlling stake in SIRI? Would they possibly want to merge SIRI with DirecTV down the road? Would they have to convert their preferred shares at that time. How much of the debt has change of control covenants in it and how easily could those be negotiated?

    Any insight into this would be greatly appreciated.......

    Homer?

  2. #2
    dread is offline
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    Hope this helps some!!

    A standstill is, in this context, a contractual prohibition on a restricted party offering to acquire, or acquiring, any shares in a listed company. The standstill is imposed under a confidentiality agreement, which the restricted party enters into when it is allowed by the listed company to conduct due diligence on the listed company. This normally occurs when the listed company is considering a possible transaction with the restricted party, such as a sale to, a friendly takeover by or merger with, the restricted party.

    http://www.minterellison.com/public/...l+restrictions

  3. #3
    relmor2003 is offline
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    No body likes to speculate more than I do. The more I think about it, Demian, the more I just cant see waiting. Why wait? Why not acquire the full 49.9% stake RIGHT NOW, while the open market has cheap shares. Can you think of I good reason to wait to accumulate shares? Probably concogted the whole BK scare thing for this purpose entirely. Probaly had Ergen involved as well. Even after a R/S, the market cap will stay the same. I cant for one mintue think they think the market cap is justified here. And they saw the books, ins and outs, in the sat business as well.. Who would know more than them? If he must report the purchase, I dont buy that. Anybody can buy these shares at these levels for him, and he can agree to acquire them later. This is EASILY avoidable so he wont have to report, but since some posters think ZERO CONSPIRACIES EXIST in the world(I wont name names), then they would say Malone is waiting to acquire shares at a much higher price...
    I say they already have the shares. And its one of the reasons for the manipulation we are seeing and have seen since the merger. This plan has been in play since at least Dec(at least), so they could have already bought 9% of the company BEFORE the deal was announced.
    They should take control the second they are able too. Merging with Apollo wont cut it, they are now the 3rd largest shareholder. They might need more shares to guarantee the vote(even assuming every retail vote goes their way).
    Last edited by relmor2003; 03-31-2009 at 05:57 PM.

  4. #4
    homer985 is offline
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    Quote Originally Posted by relmor2003 View Post
    This plan has been in play since at least Dec(at least), so they could have already bought 9% of the company BEFORE the deal was announced.
    Any purchase of 5% or more of a public company must be reported via a Schedule 13D filing, within 10 days of purchase.



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  5. #5
    Demian is offline
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    Quote Originally Posted by homer985 View Post
    Any purchase of 5% or more of a public company must be reported via a Schedule 13D filing, within 10 days of purchase.



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    Is that true for only the first 5% or for every 5% increment? Since Liberty already has a 40% stake in SIRI with the preferred shares, would they still have to file for each additional 5% increment they acquire?

  6. #6
    Demian is offline
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    Quote Originally Posted by relmor2003 View Post
    They should take control the second they are able too. Merging with Apollo wont cut it, they are now the 3rd largest shareholder. They might need more shares to guarantee the vote(even assuming every retail vote goes their way).
    How much over 50% would they need? If they already had between 40% and 49.9%, it wouldn't take much would it? How many retail holders of the common would accept being bought out for a quick buck....?

  7. #7
    cos1000 is offline
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    Quote Originally Posted by Demian View Post
    How much over 50% would they need? If they already had between 40% and 49.9%, it wouldn't take much would it? How many retail holders of the common would accept being bought out for a quick buck....?
    Demian, you are way to smart for all of this... with your questions about ownership and control... The Problem always is for the 40% investor is: Do They Really think they can run the business better than it is currently being run... Not whether or not they can buy more shares to take control... That is the question most who invest don't consider.... Believe me that the 40% shareholder has considered very well...... before their investment... These investors at 40% are willing, and I would say, partners willing to accept more risk, if the business shows signs of failure..... What do you think??

  8. #8
    cos1000 is offline
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    Quote Originally Posted by Demian View Post
    Is that true for only the first 5% or for every 5% increment? Since Liberty already has a 40% stake in SIRI with the preferred shares, would they still have to file for each additional 5% increment they acquire?
    Any and every..... you can't just buy 5% and file a 13d, buy another 5% and not have to file, and accrue a more devious ownership position beyond your initial 5% without being noticed.... and have your initial filing not brought to as fraudulent in intention and action.... try it you'll see... The only reason for being this way is to hide your ownership potential... that goes against the spirit of the requirement to file all 5% Ownership interests.... I am not a lawyer but this type of action could make me want to become one.... if allowed

  9. #9
    homer985 is offline
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    Quote Originally Posted by Demian View Post
    Is that true for only the first 5% or for every 5% increment? Since Liberty already has a 40% stake in SIRI with the preferred shares, would they still have to file for each additional 5% increment they acquire?
    When they take a 5% stake, they are required to file. Any and all changes to that ownership, require an amended filing within 10 days of that change as well.

    Liberty's preferred shares have not converted to common yet, so they have not filed the original SC13D yet. Thus you can assume that Liberty has not taken a 5% equity stake up to 10 days ago.



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    Last edited by homer985; 03-31-2009 at 07:53 PM.

  10. #10
    JohnnyIrishXM is offline
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    First off.liberty doen't have 40%of shares until converted,as for the other 9.9%,they already bought them with 530mil investment of debt..
    My theory is when the stock gets closer to $1 sp Sirius will issue shares for that debt equal to 9.9% to liberty.then try to get other debt holders to take shares and when all 8bil shares are issued the R/S happens,probably
    1-5 or 1-10 spread.Depending on stock price,but definetely before Dec 09 Jmho.
    Last edited by JohnnyIrishXM; 03-31-2009 at 07:54 PM.

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