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Liberty, controlled by John Malone, had sought jurisdiction over the satellite radio company despite owning only enough convertible stock to translate into about 40 percent of the company’s common shares. LIberty, though, has also loaned Sirius $530 million.
Analysts said the application itself suggests that Malone and Sirius CEO Mel Karmazin have serious disagreements about the direction the company. Some have speculated that Malone wants to fold it into Liberty then spin it off separately again.
The FCC’s decision means that Liberty could begin buying shares of Sirius, which would drive the stock price higher, or it could reapply after addressing some of the FCC’s issues. Or, less likely, it could give up the gambit to control Sirius entirely.
“We find Liberty Media’s applications to be unacceptable for filing because they are defective with respect to execution and other matters of a formal character,” the FCC wrote. “Specifically Liberty Media was unable to obtain the passwords, signatures and other necessary information from Sirius to properly file an electronic transfer of control application.”
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