Sirius XM CEO Mel Karmazin to step down

(Reuters) - Sirius XM Radio Inc said Chief Executive Mel Karmazin will step down on February 1, 2013, at a time when media mogul John Malone-controlled Liberty Media Corp is trying to wrest full control of the satellite radio broadcaster.

Shares of the company were down 2 percent at $2.81 in trading after the bell on Tuesday. The stock closed at $2.87 on the Nasdaq.

Liberty is Sirius's largest shareholder with a stake of just under 50 percent and had filed a petition with the U.S. Federal Communications Commission to replace the company's board.

Karmazin, who famously clashed with Sumner Redstone while at Viacom Inc, is known for his disdain of working for a controlling shareholder, and has indicated that Liberty likely wouldn't need him to stick around if it took control.

Under Karmazin, Sirius has grown its subscriber count to 23.4 million as of the end of the third quarter, and maintains an estimated 70 percent market share of new cars sold in the United States.

"We will keep our foot on the gas and continue driving ahead to finish 2012 and lay the groundwork for 2013 and beyond," Karmazin wrote in an email to employees.

"I'm looking forward to seeing - and listening to - all that is ahead for SiriusXM in the years to come."

Sirius said its board has formed a search committee to consider both internal and external candidates for its next CEO.

Liberty acquired an initial stake of about 40 percent in Sirius in 2009 as part of a deal in which it loaned the satellite radio provider $530 million to help stave off bankruptcy.

In August, Liberty said it plans to spin off its premium pay-TV network Starz LLC into a separate public company in a deal seen as taking a step closer to taking control of Sirius XM.

Liberty Media said it was considering a tax-free spinoff of its 46 percent stake in the satellite radio provider.

The discussion around an imminent Liberty-Sirius deal boosted Sirius shares as they touched a year-high of $2.97 in mid October.

(Reporting by Supantha Mukherjee in Bangalore and Liana B. Baker in New York; Editing by Saumyadeb Chakrabarty and Akshay Lodaya)