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

[Newman]

Homer, let me ask you this:

Liberty gets 6 board seats out of 15 possible.

If there is buyout talk between liberty and Sirius, do the Liberty board members have to excuse themselves based on conflict of interest?

Does Liberty get to vote their shares if it is in direct benefit to them?

What I am asking basically: If Sirius announced that they are selling the company at a whopping 250% premium (read: $1/share) to Liberty, would liberty be able to vote their shares? (assuming they had already converted). I talked to Demian at length the other night about this, and it worries me to. I know it is not their M.O., but it is possible. Does conflict of interest play any part in a decision such as this? And if not, what recourse do the shareholders have that do not agree with the sale price?

[Demian]

Homer, let me ask you this:

Liberty gets 6 board seats out of 15 possible.

If there is buyout talk between liberty and Sirius, do the Liberty board members have to excuse themselves based on conflict of interest?

Does Liberty get to vote their shares if it is in direct benefit to them?

Newman,

What about other dealings besides a buyout - debt refinancing and cross marketing with DirecTV etc.? If these guys are on both boards, who are they really working for? These same guys on the board just took 40% of the company for high interest loans, loan shark loans. They are big SIRI debt holders and are now first in line in a BK if they do a crummy job too......not to say that is their motivation.

I'm still trying to find out what the standstill restrictions are - they expire in 2 years according to this filing.

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."

[JohnnyIrishXM]

In Case anybody is wondering,the Liberty deal is not a done deal until Dec.31 2009..I just read over the filing again and was reminded by a post here something about April 15th deadline...The filing says that SiriusXM can't help or solicit a deal before April 15th but if 1 is proposed and Board of Directors think it is better they can take it and reverse liberty's deal by paying 7mil penalty price...after April 15th 2009 they can solicite a deal themselves and reverse the liberty deal until dec 2009...

[homer985]

I'm still trying to find out what the standstill restrictions are - they expire in 2 years according to this filing.

4.1 Standstill.

(a) Purchaser agrees that until the second anniversary of the Closing Date, without the prior written approval of the Independent Common Directors, none of Purchaser or any of its Affiliates will, directly or indirectly in any way, acquire, offer or propose to acquire or agree to acquire, Beneficial Ownership of any Common Stock of the Company if such acquisition would result in Purchaser or its Affiliates having Beneficial Ownership of 49.9% or more of the outstanding shares of Common Stock of the Company.

(b) Purchaser agrees that from the second anniversary of the Closing Date through the third anniversary of the Closing Date, without the prior written approval of the Independent Common Directors, none of Purchaser or any of its Affiliates will, directly or indirectly in any way, acquire, offer or propose to acquire or agree to acquire, Beneficial Ownership of any outstanding shares of Common Stock of the Company if such acquisition would result in Purchaser or its Affiliates having Beneficial Ownership of 49.9% or more of the outstanding shares of Common Stock of the Company, unless such acquisition or offer or agreement to acquire such Common Stock is made pursuant to a Permitted Tender Offer (for the avoidance of doubt, for purposes of calculating the Beneficial Ownership of Purchaser and its Affiliates hereunder, (x) any security that is convertible into, or exercisable for, any Common Stock that is Beneficially Owned by Purchaser or its Affiliates shall be treated as fully converted or exercised, as the case may be, into the underlying Common Stock and (y) Common Stock and securities convertible into, or exercisable for, Common Stock, that are Beneficially Owned by Purchaser and its Affiliates shall be aggregated).

(c) Except to the extent expressly permitted by Section 4.1(a) or (b), Purchaser agrees that until the third anniversary of the Closing Date, without the prior written approval of the Independent Common Directors, none of Purchaser or any of its Affiliates will, directly or indirectly:

(1) enter into or agree, offer, propose or seek (either publicly or privately, except to the Board of Directors or the Independent Common Directors in a manner that does not require the Company to publicly disclose) to enter into, or otherwise be involved in or part of, any acquisition transaction, merger or other business combination relating to all or part of the Company or any of the Company Subsidiaries or any acquisition transaction for all or part of the assets of the Company or any Company Subsidiary or any of their respective businesses;

(2) make, or in any way participate in, any “solicitation” of “proxies” (as such terms are defined under Regulation 14A under the Securities Exchange Act of 1934, as amended, or any successor statute, and the rules and regulations promulgated thereunder (the “Exchange Act”) disregarding clause (iv) of Rule 14a-1(2) and including any otherwise exempt solicitation pursuant to Rule 14a-2(b)) to vote, or seek to advise or influence any person or entity with respect to the voting of, any voting securities of the Company or any Company Subsidiary; provided that this subsection shall not be deemed to restrict (x) the Preferred Stock Directors from participating as members of the Board of Directors and any committees thereof in their capacity as such or (y) any Liberty Party from opposing publicly or privately, voting against and encouraging others to vote against any proposal of a third party regarding a merger or other business combination, or opposing publicly or privately any tender or exchange offer, regardless of whether such proposal or offer is supported by the Board of Directors;

(3) call or seek to call a meeting of the stockholders of the Company or any of the Company Subsidiaries or initiate any stockholder proposal for action by stockholders of the Company or any of the Company Subsidiaries, form, join or in any way participate in a “group” (within the meaning of Section 13(d)(3) of the Exchange Act and the rules and regulations promulgated thereunder) with respect to any voting securities of the Company, or seek, propose or otherwise act alone or in concert with others, to influence or control the management, board of directors or policies of the Company or any Company Subsidiaries; provided that this subsection shall not be deemed to restrict the Preferred Stock Directors from participating as members of the Board of Directors and any committees thereof in their capacity as such; or

(4) bring any action or otherwise act to contest the validity of this Section 4.1 or seek a release of the restrictions contained herein, or make a public request to amend or waive any provision of this Section 4.1.

(d) The provisions of Section 4.1(a), (b), and (c), and Section 4.2, shall terminate immediately and automatically upon the first to occur of any of the foregoing:

(1) an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of the Company or any material Subsidiary or its debts, or of a substantial part of its assets, under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect or (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Company or any material Subsidiary or for a substantial part of its assets, and, in any such case, such proceeding or petition shall continue undismissed for 60 days or an order or decree approving or ordering any of the foregoing shall be entered;

(continued)



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[homer985]

(2) the Company or any material Subsidiary shall (i) voluntarily commence any proceeding or file any petition seeking liquidation, reorganization or other relief under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in clause (1) above, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Company or any material Subsidiary or for a substantial part of its assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, or (v) make a general assignment for the benefit of creditors;

(3) any proposal relating to a merger or other transaction, pursuant to which Purchaser or any of its Affiliates would acquire majority control of the Company, shall be submitted to a vote of the holders of Common Stock of the Company pursuant to Section 4.1(a), (b) or (c) with the prior written approval of the Independent Common Directors, and such proposal shall have received the affirmative vote of a majority of the shares of Common Stock outstanding immediately prior to the commencement of such Permitted Tender Offer and not owned by Purchaser or any of its Affiliates; or

(4) after the second anniversary of the Closing Date, the Purchaser shall consummate the purchase of shares of Common Stock tendered pursuant to a Permitted Tender Offer in compliance with Section 4.1(b), if the number of shares tendered in such Permitted Tender Offer constituted a majority of the shares of Common Stock outstanding immediately prior to the commencement of such Permitted Tender Offer and not owned by Purchaser or any of its Affiliates.

(e) For purposes of this Agreement,

(1) “Closing Price” means the closing sale price or, if no closing sale price is reported, the last reported sale price of the shares of the Common Stock (or other relevant capital stock or equity interest) on The NASDAQ Global Select Market on such date. If the Common Stock (or other relevant capital stock or equity interest) is not traded on The NASDAQ Global Select Market on any date of determination, the Closing Price of the Common Stock (or other relevant capital stock or equity interest) on such date of determination means the closing sale price as reported in the composite transactions for the principal U.S. national or regional securities exchange on which the Common Stock (or other relevant capital stock or equity interest) is so listed or quoted, or, if no closing sale price is reported, the last reported sale price on the principal U.S. national or regional securities exchange on which the Common Stock (or other relevant capital stock or equity interest) is so listed or quoted, or if the Common Stock (or other relevant capital stock or equity interest) is not so listed or quoted on a U.S. national or regional securities exchange, the last quoted bid price for the Common Stock (or other relevant capital stock or equity interest) in the over-the-counter market as reported by Pink Sheets LLC or similar organization, or, if that bid price is not available, the market price of the Common Stock (or other relevant capital stock or equity interest) on that date as determined by a nationally recognized independent investment banking firm retained by the Company for this purpose

(2) “Independent Common Director” means any director who (i) is or would be an “independent director” with respect to the Company and with respect to Purchaser pursuant to NASDAQ Rule 4200(a)(15) and (ii) is not a Preferred Stock Director.

(3) “Preferred Stock Director” means any director selected to be a director by Purchaser prior to Closing and additional directors who take office after the Closing who are designated by Purchaser pursuant to the Series B-1 Preferred Stock Certificate of Designations, whether or not such person is an independent director with respect to the Company pursuant to NASDAQ Rule 4200(a)(15).

(4) “Permitted Tender Offer” is a cash tender offer for all of the outstanding shares of Common Stock that are not Beneficially Owned by Purchaser or its Affiliates at a price per share greater than the Closing Price of the Common Stock on the trading day immediately prior to the earlier of the public announcement or commencement of such tender offer.


http://idea.sec.gov/Archives/edgar/d...874/dex455.htm


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[homer985]

In Case anybody is wondering,the Liberty deal is not a done deal until Dec.31 2009..I just read over the filing again and was reminded by a post here something about April 15th deadline...The filing says that SiriusXM can't help or solicit a deal before April 15th but if 1 is proposed and Board of Directors think it is better they can take it and reverse liberty's deal by paying 7mil penalty price...after April 15th 2009 they can solicite a deal themselves and reverse the liberty deal until dec 2009...

Johnny, that April 15th date is assuming the second phase of the investment by Liberty has not closed -- but since it has, the April 15th date is now moot.

The filing notes that "until the earlier of the closing date or April 15th"... the closing date was when Liberty completed phase 2.

The two are married, now.



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[homer985]

What I am asking basically: If Sirius announced that they are selling the company at a whopping 250% premium (read: $1/share) to Liberty, would liberty be able to vote their shares? (assuming they had already converted). I talked to Demian at length the other night about this, and it worries me to. I know it is not their M.O., but it is possible. Does conflict of interest play any part in a decision such as this? And if not, what recourse do the shareholders have that do not agree with the sale price?

Newman, see my previous post(s) with the standstill restrictions... specifically 4.1, section C, paragraphs 2 and 3 -- which state that Liberty will not make any "solicitions", issue "proxies" or call a "shareholder meeting" to initiate proposals -- for 3 years.

Liberty has agreed not to do much for 3 years, basically.



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[Demian]

Newman, see my previous post(s) with the standstill restrictions... specifically 4.1, section C, paragraphs 2 and 3 -- which state that Liberty will not make any "solicitions", issue "proxies" or call a "shareholder meeting" to initiate proposals -- for 3 years.

Liberty has agreed not to do much for 3 years, basically.



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Homer,


Can't they get around those restrictions with "written approval of the Independent Common Directors"? Am I reading that right? All they need is the "written approval of the Independent Common Directors" to get around the 2 and 3 year restrictions? Liberty could take a controlling stake and buy or sell the company at any time with "written approval of the Independent Common Directors" ?

[Demian]

How come I don't see this filing posted online at Sirius/XM's IR website?

http://idea.sec.gov/Archives/edgar/d...874/dex455.htm

[JohnnyIrishXM]

Johnny, that April 15th date is assuming the second phase of the investment by Liberty has not closed -- but since it has, the April 15th date is now moot.

The filing notes that "until the earlier of the closing date or April 15th"... the closing date was when Liberty completed phase 2.

The two are married, now.



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Thanks Homer,i still don't see that in the filing,but i'll take your word on it.

P.S.XM web site didn't have the filing,found it through Demian's post,it's a done deal,and i saw that filing originally too...stupid me!!!