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.)
Martelli declined to comment on whether Simpson is currently advising Sirius XM on the offer put forth by Liberty Media when reached by The Am Law Daily, as did a firm spokeswoman.
Former Simpson associate Patrick Donnelly serves as Sirius XM’s general counsel. Dara Altman, a former Willkie Farr & Gallagher associate, serves as the company’s chief administrative officer. Neither responded to requests for comment on whether Sirius XM has retained outside counsel in connection with Liberty Media’s takeover bid.
U.S. Senate records show that Sirius XM paid $150,000 to Washington, D.C.–based The Paul Laxalt Group through the first three quarters of 2013 for lobbying work related to the satellite radio industry and online advertising. Senate filings show that Wiley Rein has also handled lobbying work for Sirius XM, but not since 2008, when the company was formed through the $13 billion stock-for-stock merger between Sirius and XM Radio.
That merger, which was approved by the Justice Department in July 2008, saw Wiley Rein take the regulatory lead for Sirius, while Latham & Watkins advised XM, according to our previous reports. Simpson and Jones Day helped the combined company win dismissal in 2012 of shareholder suits over that merger, according to sibling publication The Litigation Daily.
Malone’s company has also been busy keeping Am Law 100 firms busy on Capitol Hill. Senate records show that Liberty Media paid $470,000 to Akin Gump Strauss Hauer & Feld for lobbying work through the first half of 2013, while K&L Gates received $110,000 through the first three quarters of last year.
Meanwhile, Liberty Global turned to Hogan Lovells in October to advise on the $1 billion sale of its Chellomedia television business to AMC Networks, according to our previous reports.