Baker Botts Dialed In for Liberty on Sirius XM Bid
Liberty Media Corp., the holding company controlled by billionaire cable magnate John Malone, has offered to buy the 48 percent of Sirius XM Holdings it doesn’t already own in a roughly $10 billion all-stock deal that values the satellite radio company at $27 billion.
A late Friday SEC filing by Liberty Media shows it has retained Baker Botts as outside counsel on the proposed transaction, which would see Sirius XM become a wholly owned subsidiary of Malone’s media giant.
Liberty Media—which hired Richard Baer as its general counsel last year to replace the retiring Charles Tanabe, whose annual compensation once surpassed that of Liberty Media CEO Gregory Maffei—is separate from Liberty Global, the telecommunications conglomerate also controlled by Malone that named former Fried, Frank, Harris, Shriver & Jacobson corporate partner Bryan Hall as its new general counsel in early 2012.
But it is Baker Botts that has long enjoyed a close relationship with Malone-related media entities. The firm counts Malone’s Englewood, Colo.–based media conglomerate as a key client. Baker Botts, along with Ropes & Gray and Shearman & Sterling, advised Liberty Global roughly a year ago on its $23.3 billion cash-and-stock buy of Richard Branson’s Virgin Media in a deal that created the world’s largest broadband communications company, according to our previous reports.
Baker Botts also counseled Liberty Media last year on its $2.6 billion purchase of a 27 percent stake in cable operator Charter Communications. St. Louis–based Charter is reportedly planning to make a play for Time Warner Cable in a potential deal that would return to Malone the cable industry crown he wore when, as the so-called King of Cable, he sold TCI to AT&T for $48 billion in 1999. (Baker Botts’ relationship with Liberty began in the early 1990s when it was a TCI subsidiary; the firm also advised on its spin-off from AT&T in 2001.)
Liberty Media turned to Baker Botts for counsel in 2009 on its $530 million investment in Sirius XM in a deal that saved the satellite radio operator from a potential bankruptcy filing as it sought to avoid defaulting on $172 million in debt, according to our previous reports. Over the next few years Liberty Media has sought to add to the 46.2 percent equity interest in Sirius XM it initially acquired with that investment, eventually gaining a controlling stake in the company that received FCC approval in January 2013.
Baker Botts corporate partner Frederick "Buzz" McGrath, a longtime legal adviser to Liberty Media, is leading a team from the firm currently advising the company on its bid for Sirius XM that includes securities partner Renee Wilm, tax partner Tamar Stanley and associates Brendan Dignan, Francesca Djerejian and Brittany Uthoff. Liberty Media's in-house legal team is being led by Baer, vice president and deputy general counsel Craig Troyer (a Baker Botts alum) and secretary and deputy general counsel Pamela Coe.
As for Sirius XM, it was advised five years ago by Simpson Thacher & Bartlett on its deal with Liberty Media.
Simpson, which in October also helped Sirius XM helped fend off a shareholder suit related to that investment, has continued to handle transactional work for the New York–based company.
In August, Simpson corporate partner Peter Martelli—who was promoted to partner in 2010—led a team from the firm advising Sirius XM on its $530 million acquisition of the connected vehicle unit of auto information service Agero. (Many Sirius XM customers use the service in their cars.)