Billionaire John Malone unfairly used an investment agreement to acquire control of Sirius XM Radio Inc. without paying a takeover premium or allowing investors to vote on the deal, a lawyer for shareholders said.
Malone’s Liberty Media Corp. structured a $530 million investment in the satellite-radio provider in 2009 in a way that opened the door for the takeover without paying for any more for that right, Mark Lebovitch, an attorney for some Sirius shareholders, told a Delaware judge Wednesday.
“Malone wanted to enjoy all the economic benefits of being a controlling shareholder without having any of the responsibilities,” Lebovitch told Delaware Chancery Court Judge Leo Strine at a hearing in Wilmington.
Lawyers for ex-Sirius directors and Liberty executives say that shareholders’ claims are barred because they focus on the 2009 agreement in which Sirius directors bargained away the right to erect defenses against Malone’s takeover in exchange for the cash infusion.
Under the investment-agreement’s terms, Malone promised not to acquire a controlling interest in Sirius for three years in exchange for directors agreeing not to forgo anti-takeover defenses, lawyers for the City of Miami Police Relief and Pension Fund said in court filings. The fund invested in Sirius shares.
