Introducing the “new SiriusXM”: Liberty Media has officially disclosed a proposal to roll its SiriusXM stock group and the satellite radio business itself into “a new, consolidated public company.”
Liberty Media, which holds over 80 percent of SiriusXM (NASDAQ: SIRI) stock, today unveiled its “proposed combination,” details of which have been forwarded to the SiriusXM board special committee.
Under the suggested plan, Liberty, which also possesses around 30 percent of Live Nation, would separate its current SiriusXM stock group “by means of a redemptive split-off of a newly formed subsidiary.” (This present Liberty-SiriusXM group – or the entity that itself has a majority stake in SiriusXM – likewise trades on NASDAQ, albeit under symbols including LSXMA.)
According to higher-ups, the debuting subsidiary would in turn own “the assets and liabilities attributed to” the Liberty-SiriusXM group. Moreover, each SIRI share held by said Liberty Media group (north of 80 percent of SiriusXM, as noted) would be good for 1.05 shares in the new SiriusXM.
Those who own the remaining minority interest in SiriusXM, for their part, would receive shares in the combined operation “on a one-for-one basis” – on top of “a pro rata cash payment calculated based” upon the “outstanding net debt of LSXM” assumed by the new SiriusXM.
Illustrating the multifaceted points with examples, Liberty execs went ahead and indicated that LSXM stockholders would specifically benefit from 10.3 shares of the new SiriusXM’s common stock for each share held at closing. Meanwhile, SiriusXM minority shareholders would (at the one-to-one ratio and net-debt calculation highlighted above) receive one share in the new company plus $0.55 for each share held at closing, per the release as well as an SEC filing.
“The minority shareholders of SiriusXM would collectively own approximately 16% of New SiriusXM,” higher-ups spelled out of the structure, “and the former holders of LSXM common stock would collectively own approximately 84% of New SiriusXM.”
“Liberty’s proposal rationalizes the dual corporate structure between LSXM and SiriusXM and provides value to all shareholders with a more flexible and attractive currency in New SiriusXM,” Liberty president and CEO Greg Maffei added in part.
“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,” he proceeded.
Regarding the next steps, “no further updates on the proposed transaction will be provided” until “definitive documents” are finalized or “discussions between the parties terminate,” Liberty relayed.
When the market closed today, SiriusXM stock – which has slipped by 33 percent since 2023’s beginning and over 50 percent during the past two months – was worth $3.88 per share, representing a 3.24 percent decrease from Monday afternoon.