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Report: Sirius XM approaches Liberty Media, DirecTV

updated 11:05 pm EST, Wed February 11, 2009

Sirius takeover talks

Sirius XM CEO Mel Karmazin has reportedly established talks with DirecTV Group and Liberty Media, in what is viewed as a last ditch effort to avoid bankruptcy or a loss of control, according to Reuters. The satellite-radio provider has held preliminary talks with Liberty Media, while another report suggests the executives asked DirecTV to purchase the company. Liberty Entertainment, a division of Liberty Media, holds a controlling interest in DirecTV Group.

Talks with other companies, amid the possibility of a Chapter 11 bankruptcy filing, could also indicate that Karmazin is trying to avoid the option of allowing EchoStar's CEO Charlie Ergen to take over the company. The two executives are said to not get along and Karmazin has reportedly declined Ergen's previous takeover offers, according to the New York Times.

Ergen recently bought up a significant portion of Sirius XM's debt, putting him in a likely position to negotiate a takeover before a bankruptcy filing, or receive control through court order in the event of a Chapter 11 filing. The owed debt could also be used as a bargaining chip, with the potential to force the company into bankruptcy if the debt is converted into equity. $175 million is due to EchoStar in February, with another $400 million due in December.

The New York Post reports that Karmazin would prefer a DirecTV deal as it would probably leave him with more control of the company. A deal with Ergen, however, would be more likely to strip control away from the current CEO, or even force him to leave the company.




by MacNN Staff

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  1. Monstermind

    Joined: Dec 1969

    0

    Dump Mel!

    The current state of Sirius is HIS fault. Why keep him on?

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