Sept 27 The board of Sirius XM Radio Inc did not
breach its duty to shareholders by allowing a takeover by
Liberty Media Corp without demanding it pay a premium for the
stock, a Delaware judge ruled on Friday.
John Malone's Liberty Media acquired control of the
satellite radio broadcaster in January. The media holding
company had loaned Sirius $530 million in rescue financing in
2009, and as part of that deal Sirius' board agreed not to adopt
a poison pill or any defense measures against a Liberty takeover
after a three-year standstill.
The lawsuit by Sirius stockholder City of Miami Police
Relief and Pension Fund accused the Sirius board of tying its
own hands and abdicating its duty to shareholders.
Leo Strine, the chief judge or chancellor on the Delaware
Court of Chancery, said in his 24-page opinion that Liberty
Media is entitled to the deal it struck in 2009. He also said
the deal was fully disclosed and shareholders waited too long to
"The plaintiffs are not entitled to watch Sirius take over
half a billion dollars in capital from Liberty Media, sit on the
sidelines benefitting from the investment Liberty Media made in
Sirius until after the statute of limitations expires, and then
belatedly seek to deprive Liberty Media of the benefits of the
contract," Strine wrote.
The case is In Re Sirius XM Shareholder Litigation, Delaware
Court of Chancery, No. 7800.