John Malone’s Liberty Media Corp. won U.S. regulatory approval to assume broadcast licenses from Sirius XM Radio Inc. (SIRI:US), a step needed for Liberty to finish its takeover of the satellite radio provider.
The Federal Communications Commission, in a posting today on its website, said it approved the transfer of control of licenses to Liberty, which in March told the agency it was seeking control of New York-based Sirius.
Sirius uses satellites licensed by the FCC, and approval by the agency is a prerequisite for asserting control, Liberty has said.
Today’s approval by the FCC is a step in the transition from Mel Karmazin, 69, who took over at Sirius in 2004 after quitting as president of Viacom Inc. (VIAB:US) Four years later, he guided Sirius to its merger with XM Satellite Radio, combining the two pay-radio providers just before a slump in U.S. auto sales cut demand for pre-installed radios in cars.
After clashing with Malone, Karmazin in October said he would quit as chief executive officer and Sirius last month named James E. Meyer as interim chief while it seeks a replacement.
Malone, 71, helped Sirius avoid bankruptcy in 2009, lending the company $530 million. That deal earned Liberty billions, gave it a 40 percent stake in Sirius and put Malone on a path to control.
Liberty in filings said it will convert preferred securities and buy enough shares to own more than 50 percent of Sirius common stock within 60 days of gaining approval for the license transfers, the FCC said in today’s order.
Malone said in July he planned to spin off Sirius after gaining control of the company.
“There is no question eventually Sirius will be an independent company,” he said. “The question is, in what time frame and in what circumstances?”
Sirius has 23.4 million subscribers and became a profitable company in 2010 after more than a decade of losses. It has satellite radios installed in about two-thirds of all new automobiles.
Liberty Media rose 5 cents to $119.84 at the close in New York. Sirius rose 6 cents, or 2 percent, to $3.08.
Patrick Reilly, a Sirius spokesman, and Courtnee Ulrich, a spokeswoman for Englewood, Colorado-based Liberty, didn’t immediately respond to e-mails and telephone calls.
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