Malone close to buying major stake in co.
Will John Malone provide an 11th-hour rescue deal for Mel Karmazin?
Dow Jones reported Monday that Malone’s Liberty Media was close to a deal to buy a major stake in the debt-plagued Sirius XM Radio, which is facing the prospect of a bankruptcy filing, intensifying pressure from creditors and an unsolicited takeover offer from sat-TV provider EchoStar.
It was unclear how large a stake Liberty — which owns DirecTV, EchoStar’s bigger satcaster rival — would take or how much it would pay, though Dow Jones reported that Liberty did not intend to take over Sirius outright.
Reaching a deal with Malone would give Sirius some much-needed breathing room.
The Wall Street Journal reported on Sunday that a group of Sirius creditors were vowing to seek the ouster of Sirius CEO Karmazin if the company opted to file for Chapter 11 bankruptcy rather than consider alternatives such as a deal with EchoStar. EchoStar had quietly been buying up Sirius’ debt for months in an effort to scoop up the company. Sirius owes EchoStar a $175 million debt payment that is due today.
On Friday, Sirius shares closed at 11¢ in trading on the Nasdaq.