UPDATE 1-Liberty Media to buy out Sirius XM minority shareholders

Fri Jan 3, 2014 6:12pm EST

Jan 3 (Reuters) - Cable billionaire John Malone's Liberty Media Corp on Friday said it would offer to buy out the minority shareholders in satellite radio provider Sirius XM Holdings Inc for about 3 percent above the stock's closing value on Friday.

The all-stock buyout offer could be worth more than $10 billion, given that minority shareholders control about 46 percent of the company, which has a market capitalization of $21.5 billion.

Liberty Media became Sirius's majority owner in January 2013 after U.S. regulators gave it the green light to take control of the satellite radio operator.

Liberty said on Friday each share of Sirius common stock would be converted into 0.0760 of a new share of Liberty's Series C common stock, the equivalent of $3.68 a share.

That is just barely above Sirius XM's closing price of $3.57 on Friday and Liberty Chief Executive Officer Greg Maffei said a special committee would be formed at Sirius XM to look at the offer and that it might negotiate a higher price with Liberty.

Liberty said following completion of the deal, Sirius's public shareholders would own about 39 percent of Liberty's outstanding common stock.

In 2009, Liberty became the largest shareholder in Sirius after it floated the company a $530 million loan to help it avoid bankruptcy. Terms of that deal allowed for Liberty to convert the loan into preferred shares.

The financially strapped company Liberty rescued in 2009 is in much stronger shape five years later and has seen its shares skyrocket more than 2,600 percent over the past five years.

It has gained a key foothold in the vehicles market, which is seeing a rebound, with its radios in 70 percent of new cars in the United States.

A couple walks along the rough surf during sunset at Oahu's North Shore, December 26, 2013. REUTERS/Kevin Lamarque

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