SiriusXM snubs Liberty Media's takeover attempt — again

Sirius XM Radio Inc. delivered a counterpunch Friday to Liberty Media's hostile takeover attempt in a brief it filed with federal regulators.

Liberty Media in March threw the first punch byasking the U.S.Federal Communications Commission togive it control overSiriusXM's operating licenses. Liberty argued that its 40% stake in SiriusXM gave it "de facto" control over the satellite radio company. It refined its argument further last Thursday, arguing that its stake, and control over five of the 13 seats on the Siriusboard is "more than sufficient to determine the outcome of matters submitted to a vote of shareholders."

SiriusXM took umbrage over the characterization. In a brief filed with the FCC, SiriusXM scoffed at Liberty's argument that "40 is the new 50."

"There is no support for the remarkable proposition that a... 40% minority interest, standing alone, is sufficient to bestow control of a public company," wrote SiriusXM's attorneys, who urged the agency's commissioners to dismiss Liberty's request.

Calls to the FCC were not returned, and Liberty Media's spokeswoman did not respond to requests for comment.

Eddy Hartenstein, publisher of the Los Angeles Times, is a non-executive chairman of the SiriusXM board.

The tussle for control over SiriusXM, whichtopped $3 billion in revenue in 2011, stems from a Faustian bargain its chief executive, Mel Karmazin, made in 2009to accept a $530-million loan fromLiberty Media's chairman, John Malone. The money, which has since been repaid, saved SiriusXM from having to file for bankruptcy protection.

The deal also gave Liberty Media a 40% stake in Sirius and five seats on the company's board. But it handcuffed Malone from making further moves to take over SiriusXM at least until thisMarch. When those restrictions expired,Liberty Media made its first moveby petitioningthe FCC for a transfer of SiriusXM's operating licenses.

For now, that's the least expensive path to gaining control of SiriusXM. But Liberty has other options, which it outlined in its petition last week to the FCC. Those include accumulating enough shares of SiriusXM to boost its stake above 50%and staging a boardroom coup bycalling "a meeting of Sirius stockholders" and putting the matter to a vote. But doing so could trigger a big tax bill for Liberty Media if the transaction is deemed to be an acquisition.

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SiriusXM snubs Liberty Media's takeover attempt -- again