Liberty Media Corp in talks with Sirius XM

Reuters
Liberty-Sirius talks do not involve takeover

By Jui Chakravorty Das
NEW YORK (Reuters) - Liberty Media Corp (NasdaqGS:LINTA - News) is in talks with Sirius XM Radio Inc (NasdaqGS:SIRI - News) to invest in the satellite radio company's capital structure, a source said on Friday, as Sirius tries to stave off a takeover bid by EchoStar Corp (NasdaqGS:SATS - News).



Sirius XM's talks with Liberty are seen as a last-ditch attempt by Sirius chief Mel Karmazin to stave off the takeover bid by Charles Ergen's EchoStar, which holds $175 million in Sirius convertible bonds due on February 17.

Liberty's discussions with Sirius were friendly and did not involve a takeover of the company or a buyout of the equity, the source told Reuters.

Sirius said on Friday it had refinanced some of its debt that was due in December, but added that it still might have to file for Chapter 11 protection if talks toward refinancing other debt did not yield results by Tuesday.

Any possible agreement could include a loan to Sirius, or paying off its debt, or assuming the debt obligations. On Friday, the New York Post reported on its Web site that Liberty had offered a bridge loan of several hundred million dollars to help pay off the debt maturing Tuesday.

The newspaper, citing a source close to the situation, said Liberty would provide Sirius CEO Mel Karmazin with enough cash to repay the $175 million in debt. That gives Liberty three months to come up with a plan to help restructure roughly $600 million in Sirius XM debt coming due in May and December.

Another person familiar with the talks told Reuters both EchoStar and Liberty Media were continuing intense discussions with Sirius XM.

The talks with EchoStar are more of a hostile nature while Liberty's talks are cooperative with Sirius management, but the outcome remained uncertain, the sources said.

Liberty and EchoStar declined to comment. Sirius did not return calls for comment on Friday.

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