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Liberty Media Corp. (LMCA - Analyst Report) recently filed a new application to the U.S. Federal Communications Commission, stating its intention to acquire more than 50% of SIRIUS XM Radio Inc. (SIRI - Analyst Report) so that it can take full control of the Board of SIRIUS XM.

Liberty Media withdrew its previous application with the FCC for de facto control SIRIUS XM. Instead, the company is now willing to get a full control.

SIRIUS XM Radio is the largest satellite radio operator in the U.S. However, the company was facing a severe financial crunch in 2009, during the peak of the great recession. The significant downturn in the auto industry jeopardized SIRIUS XM’s revenue, as the company is mostly dependent on the auto sector (automobiles with inbuilt commercial radio network).

At that juncture, Liberty Media provided $530 million in loan to SIRIUS XM to avoid bankruptcy. That loan was in lieu of 40% stake of SIRIUS XM given to Liberty Media through preferred shares. During the last couple of years, SIRIUS XM has successfully turned around its fortune, with commendable subscriber growth and its services rate hike.

Just five days ago, Liberty Media raised its stake in SIRIUS XM to 48.1% through open market purchase of SIRIUS XM’s shares. However, the whole exercise will depend on the approval of the FCC for Liberty Media to take control of SIRIUS XM. Acquisition of the controlling stake of SIRIUS XM will be immensely beneficial for Liberty Media.

The satellite radio operator declared robust financial results for the second quarter of 2012 with record high revenue, EBITDA, free cash flow, and net subscriber addition. As per management, its growth momentum will further expand in the rest of 2012 and has raised its financial outlook for the second half of 2012.

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