Mel Karmazin, Sirius XM Radio Inc(NASDAQ:SIRI)’s CEO has stated on Wednesday that if Liberty Media acquires control of the latter, then his position will definitely come into question as he feels that Liberty might not want to retain him. Karmazin aired his views at an investment conference put on by Bank of America Merrill Lynch, though he clearly stated that he has not indulged in any meetings or discussions with Liberty about this topic.
One of the reasons why Karmazin might feel this way is because his contract with Sirius ends this year. He feels that Liberty might not want to keep him on because the structure of the organization is superb, the management team is brilliant, and the overall business prospects are pretty good.
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Sirius was almost going into bankruptcy in February 2009, but the media conglomerate, which is manned by cable TV magnate John Malone, bailed them out of the situation by entering into a deal where Liberty would lend Sirius $530 million in return for preferred stock, which would have ensured a 40% stake. Since then, Liberty has taken steps to increasing its ownership and has made several references of a takeover. If the FCC gives the green signal, the acquisition will take place at the end of this year. A new board will be brought it and the business, including some other assets, will be spun off
According to a regulatory filing on Tuesday, Liberty presently has ownership of 558.6 million shares of Sirius. If the preferred stock is included, then the ownership comes to more than 49% and Karmazin is confident that Liberty will soon be a 50% owner in a few days. The shares of Liberty declined slightly by 77 cents to $102.52, whereas Sirius fluctuated all day and closed at 3% to $2.42 on Wednesday. The stock is now up 1.65%.