Sirius XM Is a Mail-Order Bride

Liberty Media (NAS: LMCA) is almost there. John Malone's media conglomerate has snapped up 30.9 million shares of Sirius XM Radio (NAS: SIRI) over the past three trading days. The move raises Liberty Media's effective stake to 49.7%. Just one more nibble like this and Malone will have a majority stake in the satellite-radio monopoly.

This certainly didn't seem possible earlier this year. Liberty Media, armed with nothing more than a 40% preferred-share stake, petitioned for de facto control in a move that would've given Malone control of the company without physically owning more than 50% of the company. Regulators balked, and some wondered whether Liberty Media would either cash out of the preferred-share stake it received when it stepped up as Sirius XM's lender three years ago or simply just ride it out and enjoy Sirius XM's improving fundamentals.

Liberty Media went with Plan C, buying Sirius XM's stock in manageable chunks on the way to majority control. The FCC will still need to sign off on giving Liberty Media control, but that seems fairly likely after seeing the media conglomerate jump through so many hoops to get to nearly 50% ownership.

What will Liberty do after it buys up another 20 million or so shares and gets an approving nod from regulators? The Wall Street Journal points out that Liberty will then be free to replace Sirius XM's management or spin off its stake to Liberty Media shareholders in a tax-friendly transaction.

The latter is likely. Liberty Media executed a similar stunt with the spinoff of DirecTV (NYS: DTV) to its shareholders three years ago. What's good for the satellite-television company may very well also be good for the satellite-radio provider.

However, don't bet on seeing the former take place. CEO Mel Karmazin is well regarded, and he's a big reason the stock has been one of the market's biggest winners since it bottomed out at $0.05 three years ago. Karmazin's contract is up at the end of this year, but there doesn't seem to be a reason to fix what isn't broken.

The Liberty Media soap opera has been a distraction, but it hasn't really hurt the company's financial performance or the stock, which hit a four-year high last month.

Still, let's just hope Liberty Media gets this over with. The months-long courtship for this shotgun wedding is getting old.

Running of the bulls
I remain bullish on Sirius XM's future. It should come as no surprise that I'm promoting the CAPScall initiative for accountability by reiterating my bullish call on Sirius XM for Motley Fool CAPS.

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