Liberty’s Malone Says Sirius Will Eventually Be Spun Off

By Edmund Lee - 2012-07-12T22:29:19Z

Billionaire John Malone said his effort to take control of Sirius XM Radio Inc. (SIRI) will eventually lead to a spinoff of the largest U.S. satellite-radio company.

Malones Liberty Media Corp. (LMCA) announced plans six weeks ago to assert control of the satellite-radio company after receiving approval from the Federal Communications Commission. The goal is to spin off Sirius, in keeping with Libertys history of making its properties, including DirecTV and Liberty Global Inc., into their own publicly held companies, he said yesterday.

If Im in control, I like to have separate companies, run independently, with public shareholders investing in that business, Malone told reporters gathered in Sun Valley, Idaho, for an Allen & Co. conference. There is no question eventually Sirius will be an independent company. The question is, in what time frame and in what circumstances?

Liberty needs FCC approval to complete a takeover because Sirius holds airwave licenses issued by the agency. Sirius holds airwave licenses issued by the agency. Sirius, led by CEO Mel Karmazin, has opposed Liberty control in its own FCC filings.

The company will probably execute a so-called Reverse Morris Trust, which involves splitting off its Sirius stake as a separate entity and giving its stockholders the option to hold or sell their Sirius shares, according to James Ratcliffe, an analyst at Barclays Capital Inc. in New York.

Malone said he had dinner with FCC Chairman Julius Genachowski last night, declining to say what was discussed.

Sirius rose 1.7 percent to $2.07 at the close in New York. The stock has climbed 13 percent this year. Liberty shares, up 15 percent in 2012, fell less than 1 percent today to $89.64.

Liberty Media Chief Executive Officer Greg Maffei isnt likely to want the job of running Sirius, Malone said. As head of Liberty, Maffei manages a holding company with a wide range of investments, everything from cable programmer Starz LLC to the Atlanta Braves baseball team.

Gregs not an operating man, Malone said yesterday. There are plenty of good managers, including inside the company.

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Liberty’s Malone Says Sirius Will Eventually Be Spun Off