Sept 27 (Reuters) - The board of Sirius XM Radio Inc did notbreach its duty to shareholders by allowing a takeover byLiberty Media Corp without demanding it pay a premium for thestock, a Delaware judge ruled on Friday.
John Malone's Liberty Media acquired control of thesatellite radio broadcaster in January. The media holdingcompany had loaned Sirius $530 million in rescue financing in2009, and as part of that deal Sirius' board agreed not to adopta poison pill or any defense measures against a Liberty takeoverafter a three-year standstill.
The lawsuit by Sirius stockholder City of Miami PoliceRelief and Pension Fund accused the Sirius board of tying itsown hands and abdicating its duty to shareholders.
Leo Strine, the chief judge or chancellor on the DelawareCourt of Chancery, said in his 24-page opinion that LibertyMedia is entitled to the deal it struck in 2009. He also saidthe deal was fully disclosed and shareholders waited too long tosue.
"The plaintiffs are not entitled to watch Sirius take overhalf a billion dollars in capital from Liberty Media, sit on thesidelines benefitting from the investment Liberty Media made inSirius until after the statute of limitations expires, and thenbelatedly seek to deprive Liberty Media of the benefits of thecontract," Strine wrote.
The case is In Re Sirius XM Shareholder Litigation, DelawareCourt of Chancery, No. 7800.
- Professional Services
- Mergers, Acquisitions & Takeovers
- Liberty Media
- Sirius XM Radio Inc