John Malone’s Liberty Media wants the moon and the stars.
The media mogul wants Liberty to make Sirius XM Holdings, which it already controls through a 52 percent stake, a wholly owned subsidiary — just a year after it boosted its stake to a majority and ousted boss Mel Karmazin.
Liberty outlined a proposal on Friday for a $10 billion all-stock swap that gives shareholders in the satellite radio firm a 3 percent premium on Sirius’ closing price of $3.57.
Liberty would issue a new C class of shares. If approved, the deal would give Sirius shareholders a 39 percent non-voting stake in Liberty Media.
The transaction was naturally labelled as a “tax-free” transaction — a hallmark of a John Malone deal.
The move comes at a time when Liberty Media is also pursuing a possible merger between two big cable companies, Charter Communications, in which it owns a 27 percent stake, and Time Warner Cable. It owns a 1 percent piece of TWC.
The Sirius transaction could help Charter make a bid for TWC, its much bigger rival.
While whispers about a possible merger have been ongoing for months, there’s a big gap between the likely offer price and what TWC would accept.
Liberty has a long history with Sirius. Malone, in one of his most profitable deals, rescued the radio company from near bankruptcy back in 2009 when Liberty agreed to loan Sirius $530 million in exchange for a large equity stake.
Liberty CEO Greg Maffei, in a statement, said shareholders in both Liberty and Sirius will “enjoy enhanced liquidity as shareholders of a $27 billion market capitalization company.”
Sirius has continued to add subscribers as the auto market has risen — but it is being threatened by internet radio players such as Pandora.
Sirius has 26 million subscribers and an 8 percent share of the radio audience. The service costs $14.99 per month.
Liberty Media’s other assets include pay-TV service Starz, the Atlanta Braves, and minority stakes in Live Nation and Barnes & Noble.
Liberty’s stock dropped as much as 3 percent in after hours trading, after closing regular trading at $145.33, up 0.6 percent.
The stock has risen 33 percent in the past 12 months.
