The plan raises further questions about the future of Sirius CEO Mel Karmazin, according to a Wall Street observer.
Liberty refiled its FCC application for control of Sirius’ licenses, which involves a plan to nominate and vote for its own slate of board members. The company will also convert almost half of its preferred stock into common stock, giving it over 32 percent of common stock.
The FCC recently rejected Liberty’s request to control Sirius. Liberty, which currently has five of the 13 seats on the Sirius board, said Thursday it plans to nominate a majority of directors when practical. Until then, the company said it would continue to buy Sirius shares so it gets to a position where it can “replace the entire board of directors by unilateral action.”
“We believe that Liberty’s new plan to take control of Sirius is very likely to succeed,” said Lazard Capital Markets analyst Ross Cohen. “Once it controls the board, we expect it to ramp up [stock buybacks], positive for both Sirius and Liberty Media stocks.”
Sirius couldn’t be reached for comment.