Vintage John Malone: swooping in and helping to prop up a weakened company. He did it years back with a then flat-broke Ted Turner, giving him money to help him create an empire. Malone did it with Barry Diller years back when Diller, bounced by the owners of shopping channel QVC, needed help creating another shopping empire that has since become IAC Interactive (IACI). None of those deals came without strings, and Malone always took a stake. That sounds a lot like the current Sirius deal, and with Malone wielding a wad of cash, just about anything is possible.
DirecTV Sets Merger With Liberty Media Spinoff
By Cyrus Sanati
New York Times / May 4, 2009
DirecTV, the satellite television provider, said Monday it would merge with a division to be spun off from Liberty Media in an all-stock transaction that will give media mogul John Malone and his family a 24 percent voting stake in the new entity. …
As part of the transaction, Mr. Malone, Liberty Media's chairman, will receive a special class of DirecTV stock that gives him and his family 24 percent voting power, DirecTV said.
Liberty was already DirecTV's largest shareholder, owning a nearly 54 percent stake (although its voting power was effectively limited to 47.9 percent). …
DirecTV, Liberty Media sued over merger plans
THE ASSOCIATED PRESS / May 14, 2009
Two public pension funds are suing DirecTV Group Inc. and Liberty Media Corp. over plans to merge DirecTV into Liberty's entertainment unit, then spinning them off into a new publicly traded company. Advertisement
The Key West Police and Fire Pension Fund in Florida and City of Roseville Employees' Retirement System in Michigan filed the lawsuit on Tuesday in the Chancery Court in Delaware.
The plaintiffs allege that DirecTV shareholders are overpaying for assets it will get from the entertainment unit. They also said the deal's "unreasonable'' $450 million breakup fee, plus up to another $10 million in expenses, would deter other potential bidders.
Key West pension fund managers sue over DirecTV
By SEAN KINNEY
Florida Keys Keynoter / May 27, 2009
Managers of the pension fund, valued at $45.9 million as of Dec. 31, allege the merger wouldn't be in the best interest of shareholders and unfairly gives Liberty Chairman John Malone majority voting stake in the new company.
The pension managers assert that Liberty's $14 billion contribution to the merger is an inflated estimation of value. The merger agreement would also drop a contractual restriction previously in place that does not allow Liberty, via Malone, to have more than 50 percent voting stake.
Additionally, regular shareholders would see a 1:1 conversion of stocks from the old company to the new company, while Malone would get a little more than 1:1 — which would add up considering the number of shares at stake.
The deal also includes a provision to transfer more than $2 billion in debt from Liberty to the newly formed company.
Before the lawsuit was filed, the Wall Street Journal reported that "DirecTV agreed to buy the Liberty entity for a small premium. It also adopted Liberty's dual-class voting structure, against DirecTV's preference, in a way that only benefits Mr. Malone."