Sirius XM Stock Rises Amid Accusations Liberty Is Lowballing Shareholders
Shares of Sirius XM soared 7 percent to $3.83 on Monday as investors seemed to conclude that a buyout offer from Liberty Media is too low and headed higher.
On Monday, multiple shareholders disparaged the offer of $3.68 that Liberty made public on Friday, including famed consumer activist Ralph Nader, who called the proposal “ludicrous” in a statement issued via press release. Nader also threatened legal action.
“Sirius was trading over $4.00 a share just a few weeks ago and is a very fast growing company with bright indicators and registers four stars by Standard & Poor’s, which recommends a buy,” Nader said. “I am sure that I, along with other shareholders in Sirius XM, will be interested in a legal challenge to John Malone’s company for lowballing Sirius XM’s shareholder value.”
The Green Party member, who has run for president five times, ends his statement with: “Carl Icahn -- take notice and interest,” which many on Monday were presuming was a plea for the billionaire investor to challenge Malone for control of Sirius XM. Any battle along those lines would certainly boost the price of Sirius XM and increase the value of Nader’s holdings, though Nader did not reveal the number of shares in his portfolio.
Liberty, which already owns a controlling stake in Sirius XM, offered last week to convert shares of Sirius into what would be new shares of Liberty Series C non-voting stock. The deal would would make Sirius XM a wholly owned subsidiary of Liberty, but the proposed exchange rate values Sirius at only $3.68 a share, which was a 3 percent premium to Friday’s closing price, but a 4 percent discount to where the stock closed on Monday.
Also on Monday, the firm Rigrodsky & Long, P.A. said it is “investigating potential legal claims against the board of directors of Sirius XM regarding possible breaches of fiduciary duties and other violations of law related to the company’s receipt of a proposal to be acquired by Liberty.”
The firm Levi & Korinsky also said on Monday that it is “investigating” the board of directors at Sirius XM to determine whether its members are “engaging in a fair and adequate sales process."
Sirius XM declined a request for comment.