Liberty Media proposes SiriusXM merger
September 27, 2023
By Chris Forrester
Liberty Media, which already controls US pay-radio service SiriusXM, plans to combine the two businesses, and then spin-off the radio company in a typical move by cable giant John Malone.
The proposed scheme aims to spin off (or “split off”, in the words of the proposal) the then Liberty SiriusXM Group or LSXM, the group through which it already owns a 83 per cent stake in SiriusXM, into a new unit that would merge with the radio company.
“SiriusXM’s minority shareholders will also benefit from enhanced trading dynamics, including increased liquidity and likelihood of future index inclusion,” said Liberty Media CEO Greg Maffei.
In addition, the minority shareholders of SiriusXM would receive a pro rata cash payment calculated based on the amount of the outstanding net debt of LSXM effectively assumed by New SiriusXM in the proposed transaction.
“Liberty’s proposal rationalises the dual corporate structure between LSXM and SiriusXM and provides value to all shareholders with a more flexible and attractive currency in New SiriusXM,” added Maffei. “SiriusXM minority shareholders will also benefit from enhanced trading dynamics, including increased liquidity and likelihood of future index inclusion. We are excited about the prospects for New SiriusXM and look forward to remaining meaningfully invested in the business. This simplified structure will also allow management to better focus on its strategic priorities, drive the company’s continued growth and simplify the investor relations story.”
SiriusXM, which has its own board of directors, said it was evaluating the offer.
After the proposed merger, which because of the existing ownership structure will almost certainly go ahead, minority investors of SiriusXM would own about 16 percent of the new company, while Liberty Media would own the rest.
Shares in SiriusXM fell 9 per cent on September 26th following the announcement.