UPDATE 1-Sirius XM plans to adopt poison pill

NEW YORK, April 29 (Reuters) - U.S. satellite radio provider Sirius XM Radio Inc, which is 40 percent controlled by Liberty Media, plans to adopt a shareholder-rights plan that makes hostile takeovers more difficult.

Under the plan -- known as a poison pill -- if any person or group buys 4.9 percent or more of Sirius' outstanding shares of common stock without the approval of the board, a significant dilution in the voting and economic ownership of the investor would occur, Sirius said on Wednesday.

The plan exempts future acquisitions of common stock by Liberty Media's Liberty Radio LLC.

Analysts have said that Sirius, which was targeted by EchoStar Corp earlier this year, could be an attractive acquisition from a tax perspective because its net operating losses can be carried forward to help offset taxes against future profits.

'Our net operating loss carry-forwards are an important asset of the company; an asset that we believe we should make every effort to protect,' said Sirius Chief Executive Mel Karmazin. 'The rights plan is intended to enhance stockholder value; it has not been implemented for defensive or anti-takeover purposes.'

Denver-based Liberty Media, controlled by cable pioneer John Malone, agreed to lend $530 million to Sirius in February in exchange for a 40 percent equity stake, saving the debt-laden satellite radio provider from possible bankruptcy.

The deal came after Charlie Ergen's satellite TV company EchoStar had tried to take over Sirius XM by snapping up hundreds of millions of dollars of its debt.

'It looks to me like Liberty is going to make sure no one else can dilute their majority stake or otherwise take control of Sirius so they have access to the NOL (net operating loss),' said Kaufman Bros analyst Todd Mitchell.

Sirius said its board has approved the shareholder-rights plan, which will be submitted for a stockholder vote by June 30, 2010. If stockholders do not approve the rights plan by this date, it will terminate.

The rights plan will last until Aug. 1, 2011, unless terminated by the board, Sirius said.

Liberty could not immediately be reached for comment.

Shares of Sirius were flat at 39.5 cents in extended trading.
(Reporting by Yinka Adegoke and Tiffany Wu, editing by Matthew Lewis) (To read more about the media business, visit the Reuters MediaFile blog at http://blogs.reuters.com/mediafile/) Keywords: SIRIUSXM/ ([e-mail]; + 1 646 223 6142; Reuters Messaging: [e-mail]) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.