Liberty Media

Liberty Media has agreed to $530 million in loans to Sirius XM Radio, saving the satellite radio provider from possible bankruptcy and giving Liberty a 40 percent equity stake. Under the agreement, Liberty [LINTA 3.16 -0.15 (-4.53%) ], controlled by media mogul John Malone, would offer loans to Sirius [SIRI 0.17 0.07 (+71.3%) ], a portion of which will help pay $171.6 million in debt that was due on Tuesday.

Sirius XM Satellite Radio appeared close to staving off bankruptcy by striking a deal with Liberty Media, the owner of DirecTV, people briefed on the matter said Monday. The two sides have not finalized an agreement, but any such deal is likely to involve the beleaguered satellite radio operator selling a stake in itself to Liberty, freezing out a takeover bid by Echostar Communications, which owns the Dish Network.

Mr. Ergen and Sirius’s chief executive, Mel Karmazin, have had a long-running feud, one that complicated negotiations between the two companies. It was unclear earlier in the talks between the two whether Mr. Ergen would keep Mr. Karmazin on as Sirius’s chief executive, though the two had made some progress over the past week. But Sirius appeared to clearly prefer a deal with Liberty, Echostar’s biggest rival and a white-knight bidder who would have largely preserved the satellite radio company’s existing structure.