On Tuesday, top executives at SiriusXM and Liberty Media defended a plan by the conglomerate to wholly absorb the satellite radio company for $3.68 a share, a price that some investors (such as Ralph Nader) consider to be too low. SiriusXM CEO Jim Meyer reminded Wall Street analysts during a session at the Citi Internet, Media and Telecommunications conference in Las Vegas that Liberty has been a stakeholder in SiriusXM for five years and that some Liberty executives are SiriusXM board members.
"It works great," he explained, according to the Hollywood Reporter. "There's no drama here. Liberty won't do the deal -- which I think, by the way is great -- without the majority of the minority shareholders approving. And I think that's all there is to say."
Liberty CEO Greg Maffei also spoke at the conference and said the deal would lead to "a more rational capital structure going forward." While it would give Liberty more access to Sirius XM's cash flow, it doesn't mean that Liberty is preparing to purchase another cable TV company, as has been speculated, Maffei assured. He added that a clean acquisition of SiriusXM also will help the satcaster compete in an era where the Internet and iTunes are available in automobiles.
Meanwhile, former DirecTV and Tribune CEO Eddy Hartenstein has been tapped to lead a special committee that will evaluate the proposal, which involves creating a Liberty Series C stock that would be traded for SiriusXM shares. The deal will be conditioned on the approval of both the special committee and a majority of the public stockholders.