DealZone

But Siriusly

February 17, 2009

IAC-LIBERTY/TRIALJohn Malone probably won’t lose much sleep over his $530 million loan to Sirius XM Radio. His media empire, Liberty Media, has a market cap of $12.4 billion, so Malone’s 40 percent stake in Sirius XM may be something of a punt. And in the satellite broadcasting industry, Malone certainly has a good leg.

Sirius XM has a big debt pile — $3.25 billion, with $171.6 million due today — but it also has a sexy subscriber base of 20 million users, which rivals the top cable operations in the country. Malone and rival Charles Ergan would have been looking at that number as a palliative for the exorbitant talent contracts Sirius boss Mel Karmazin has (Thanks, KB)  doled out to Howard Stern, Oprah Winfrey and Martha Stewart.

Liberty shareholders might have wanted Malone to wait for the bankruptcy to hit and bid for the satellites and other pieces. But Ergan, owner of EchoStar and Dish Network and holder of the Sirius XM debt coming due today, would have the pole position in an asset sale.

The satellite radio model banks heavily on a healthy U.S. auto market. U.S. automakers are in Washington today, where they may find a more sympathetic ear with a Democrat in the White House. Keeping satellite radio afloat is probably not among the points that GM and Chrysler will present in their case for more tax-funded support, but perhaps Malone is betting the bailout will ignite a recovery in satellite radio’s fortunes.

Deals News:

* The board of Italian power company Enel SpA meets today to approve buying Acciona’s 25 percent stake in Spain’s Endesa, a source close to the matter said. Other sources have put the value of the deal at about 11 billion euros. The purchase would lift Enel’s stake in Endesa to 92 percent.

* Vale, Xstrata and Rio Tinto are among the companies that have submitted proposals to develop Mongolia’s prized $2 billion Tavan Tolgoi coal mine, according to two sources with direct knowledge of the matter.

* Shares in Oz Minerals, the world’s second-largest zinc miner, jumped 29 percent after it agreed to a $1.7 billion takeover bid from Chinese state-owned trading group Minmetals.

* Britain’s BG Group raised its bid for Australian coal seam gas firm Pure Energy by 25 percent to nearly $650 million, trumping a rival offer by Royal Dutch Shell’s Australian partner Arrow Energy.

* The world’s fifth-biggest cement group Italcementi will bid for full control of its Paris-listed unit Ciments Francais in an all-paper deal, the companies said.

* U.S. fund Steel Partners said it had withdrawn its proposal to acquire 33.3 percent of Japanese brewer Sapporo Holdings, citing the firm’s performance and refusal to negotiate with it. Steel Partners, which has an 18.6 percent stake in Sapporo, had offered to buy the firm’s shares at 875 yen per share.

* Sanofi-Aventis has no comment on newspaper reports it is in takeover talks with Brazilian generic drugmaker Medley, the world’s third largest drugmaker said. French newspapers Les Echos and La Tribune, citing a report in Brazilian newspaper Valor Economico, said that Sanofi was interested in buying Brazil’s biggest generics drugmaker, which is valued at $220 million.

(PHOTO:Liberty Media Corporation Chairman John Malone returns to the Chancery court in Wilmington, Delaware, after a lunch break March 10, 2008. REUTERS/John Randolph)

Comments
2 comments so far | RSS Comments RSS

Karmazin did not dole out contract to Howard Stern. It was prior to Mel that the deal was done.

Mel is truly the Zen Master.

Posted by KB | Report as abusive
 

Thanks for catching that, KB. While the Zensei may have to bend like a reed in the ill wind of recession, and though he may not have been responsible for overpaying for the likes of Howard Stern, I remain hopefully confident that Satellite radio survives. Considering how bleak my commute, house-cleaning and morning coffee would be without it I can be nothing but hopeful.

Posted by Chris Kaufman | Report as abusive
 

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