Liberty Media was said to be near a deal last night to invest in Sirius. In return, Liberty, whose holdings include DirecTV, would receive a major stake in the company, according to a report by the Wall Street Journal. A deal would allow Sirius to avoid bankruptcy.
2/17/2008 11:00a.m. UPDATE John Malone's Liberty Media has agreed to lend $530 million to Sirius XM Radio in exchange for a 40 percent equity stake, saving the satellite radio provider from possible bankruptcy and sending its shares up almost 100 percent.
Under the agreement, Liberty would first provide a $280 million senior secured loan to Sirius XM, of which $250 million would be funded on Tuesday to help the satellite radio company repay $171.6 million in convertible notes maturing today.
Then Liberty would provide another $150 million loan to XM Satellite Radio, Sirius XM's wholly owned subsidiary, and also purchase up to $100 million of XM's credit facilities.
Once the loans are completed, Sirius XM would issue Liberty 12.5 million shares of preferred stock convertible into 40 percent of common stock.