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Thread: SIRIUS XM Adopts Stockholder Rights Plan

  1. #1
    erpa1119 is offline
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    SIRIUS XM Adopts Stockholder Rights Plan

    http://finance.yahoo.com/news/SIRIUS...5416.html?.v=1

    NEW YORK, April 29 /PRNewswire-FirstCall/ -- SIRIUS XM Radio (Nasdaq: SIRI - News) today announced that its Board of Directors has adopted a stockholder rights plan to preserve the value of significant tax assets associated with the company's tax net operating loss carryforwards under Section 382 of the Internal Revenue Code.

    Under the rights plan, one right will be distributed for each share of common stock of SIRIUS XM outstanding as of the close of business on May 11, 2009. Pursuant to the rights plan, if any person or group (subject to certain exceptions specified in the rights plan) acquires 4.9% or more of the outstanding shares of common stock of SIRIUS XM (assuming for purposes of this calculation that all of the Company's preferred stock is converted into common stock), without the approval of the Board of Directors, a significant dilution in the voting and economic ownership of such person or group would occur. The rights plan may be terminated by the Board of Directors of SIRIUS XM at any time prior to the rights being triggered.

    "Our net operating loss carryforwards are an important asset of the Company; an asset that we believe we should make every effort to protect. This rights plan protects the interests of all stockholders and preserves these substantial tax benefits for the Company," said Mel Karmazin, Chief Executive Officer of SIRIUS XM. "The rights plan is intended to enhance stockholder value; it has not been implemented for defensive or anti takeover purposes."

    The rights plan will continue in effect until August 1, 2011, unless earlier terminated or redeemed by the Board of Directors of SIRIUS XM or certain other events occur. The Company plans to submit the rights plan to a stockholder vote by June 30, 2010, and if stockholders do not approve the rights plan by this date it will terminate.

    Additional information regarding the rights plan will be filed by SIRIUS XM in a Current Report on Form 8-K with the Securities and Exchange Commission. Stockholders of record of SIRIUS XM as of May 11, 2009 will be mailed a summary of the rights plan.

  2. #2
    relmor2003 is offline
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    Ok, after 10 reads I think Im good.
    Massive dilution if someone buys over 4.9%. Basically this is my bitch, stay away.... From Liberty to all suitors. Or come hard or dont come at all basically. I may sell, but on my terms, MY price.

  3. #3
    SiriMonkey is offline
    Quote Originally Posted by relmor2003 View Post
    Ok, after 10 reads I think Im good.
    Massive dilution if someone buys over 4.9%. Basically this is my bitch, stay away.... From Liberty to all suitors. Or come hard or dont come at all basically. I may sell, but on my terms, MY price.
    Translation, good for the shareholders? Thanks for reading
    this 8 1/2 times more than I did. Just couldn't make it through
    the second time, lol.
    Julie

  4. #4
    relmor2003 is offline
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    Quote Originally Posted by julietoo View Post
    Translation, good for the shareholders? Thanks for reading
    this 8 1/2 times more than I did. Just couldn't make it through
    the second time, lol.
    Julie
    Of course John needs to give the definative word on this. Then Homer needs to confirm what John says, then we will have the official announcement on how good this is.

  5. #5
    homer985 is offline
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    Quote Originally Posted by relmor2003 View Post
    Of course John needs to give the definative word on this. Then Homer needs to confirm what John says, then we will have the official announcement on how good this is.
    This was my post on Yahoo tonight... sorry if I sound cynical now, but this has Liberty written all over it.

    ~~~~~~~~

    The speculation on the boards tonight is bit wild... it all comes down to protecting the company that is now in charge of Sirius... that's all. Liberty is in the door and they're going to do whatever it takes to make sure no one else gets in...


    http://finance.yahoo.com/news/Sirius...7182.html?.v=1

    "It looks to me like Liberty is going to make sure no one else can dilute their majority stake or otherwise take control of Sirius so they have access to the NOL (net operating loss)," said Kaufman Bros analyst Todd Mitchell.
    In reality, I can't blame Liberty for demanding this (I bet they did). You'll note that the shareholder rights agreement expires on Aug 1, 2011 -- which is a little more than two years after the signing of the Liberty deal. According to the Liberty investment agreement, they are allowed to make a tender offer for the remaining Sirius shares, but not until 2 years after Phase 2 is completed, and they must obtain BOD approval first. If they don't get BOD approval, then they must wait 3 years (March 2012) until buying out the common. If this weren't the case, then why have an expiration on the poison pill? It's to make sure no one else gets in until Liberty can take it all. They can take their ownership up to 49.9% over the next 2 years, then buy out the remaining common in 2011... this pill locks out others.

    To me, the timing of all of this is too perfect... Liberty is holding 40% of the cookie jar and have now put the lid on it and is sitting on it for the next 2 years to make sure no one else can take the cookies. Then when their Stand-still restriction is up, they're going to take (buy up) the rest... for whatever cheap value they can get for it.

    Good for shareholders? Well, to me it means the Liberty will do whatever it takes to keep the company afloat - but at the same time, the negative is that I firmly believe that the clock is now ticking on the common shareholders. We now have a little more than 2 years until we're all bought out.

    IMHO


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    Last edited by homer985; 04-29-2009 at 08:57 PM.

  6. #6
    ZealonsUnited is offline
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    ....meaning Liberty gets controlling interest and takes Sirius private? No good for us?

  7. #7
    trippingthespeculatingpos is offline
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    well we are not gonna get bought out down here at this price thats for sure, and i dont think that it is inevitable as homer implies. Taking some big jumps there, yeah that could be a possibility down the road but you say it like its a done deal.

  8. #8
    trippingthespeculatingpos is offline
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    and why wouldnt they just accept a 50 or 60 percent interest and leave it public. why didnt they take dtv private then? or time warner?

  9. #9
    homer985 is offline
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    Quote Originally Posted by trippingthespeculatingpos View Post
    and why wouldnt they just accept a 50 or 60 percent interest and leave it public. why didnt they take dtv private then? or time warner?
    From what I can tell -- its the way the Investment Agreement is written. Liberty can make a tender off for the company in 2 years with BOD approval -- but it must be for all remaining shares.

  10. #10
    trippingthespeculatingpos is offline
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    homer i trust your take on this stuff immensely, would you mind copying the part of the agreement you are referring to that says it must be for all remaining shares to save me like 5 hours of searching. No hurry whenever you get a chance. On that note, myself having a very low cost avg i am not worried about a buyout 2 years from now, i assume we will be able to get a much better price in that climate and anything over a dollar for me is plenty of gains.

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