John Malone’s Liberty Media was near a deal late Monday to invest in Sirius XM Radio in return for a major stake, according to people familiar with the matter.
Though the two sides remained in negotiations over the final details, Malone appeared poised to edge past rival media baron Charles Ergen for a piece of the troubled satellite-radio operator. The parties hoped to announce an agreement before the New York market opens today.
A deal would create a satellite-media juggernaut around DirectTV Group, the country’s leading satellite-TV provider, and Sirius, the sole satellite-radio operator in the U.S. Under the proposed agreement, Douglas County-based Liberty would invest several hundred million dollars in Sirius in two stages and eventually control about half of the company, the people said.
Ergen had been seeking outright control in return for a roughly $500 million investment and an agreement to restructure about $400 million in Sirius debt that he holds.
A deal would allow Sirius to avoid bankruptcy. The company must pay about $175 million in notes held by Ergen by the close of business today. It has warned that it will probably be forced to file for bankruptcy if it doesn’t secure a deal.
It’s unclear whether Ergen — the satellite-TV pioneer behind Dish Network and sister firm EchoStar, also headquartered in Douglas County — will continue to pursue Sirius. Unlike Liberty, which has presented itself as a “white knight,” Ergen’s approach has been more aggressive.
Ergen, a longtime adversary of Sirius chief executive Mel Karmazin, began amassing Sirius debt last fall as part of a stealth attack.
Earlier this month, he acquired the $175 million in Sirius debt that expires today, a step he was hoping would force the company into a deal with him.
Ergen and Sirius cleared most obstacles to a deal last week, according to people in both camps. But Sirius preferred a deal that wouldn’t give an investor full control and turned to Liberty.
Liberty Media’s far-flung empire includes stakes in satellite broadcasters, Web properties and cable channels, such as the QVC home shopping cable networks, as well as the Atlanta Braves baseball franchise.
