SiriusXM CEO Jennifer Witz
Courtesy of SiriusXM
Liberty Media, led by president and CEO Greg Maffei and chairman John Malone, stated Tuesday that it has communicated a proposal to a particular committee of the board of Sirius XM Holdings, outlining the phrases of a proposed mixture of the Liberty SiriusXM monitoring inventory group, which is listed beneath the inventory ticker image LSXM, with the satellite tv for pc radio large, led by CEO Jennifer Witz, to kind a “new, consolidated public firm.”
The minority shareholders of SiriusXM would collectively personal roughly 16 p.c of what’s dubbed “New SiriusXM,” with the previous holders of LSXM frequent inventory collectively proudly owning roughly 84 p.c.
“Liberty’s proposal rationalizes the twin company construction between LSXM and SiriusXM and gives worth to all shareholders with a extra versatile and enticing forex in New SiriusXM,” stated Maffei. “SiriusXM minority shareholders may also profit from enhanced buying and selling dynamics, together with elevated liquidity and chance of future index inclusion.”
He concluded: “We’re excited concerning the prospects for New SiriusXM and sit up for remaining meaningfully invested within the enterprise. This simplified construction may also permit administration to raised deal with its strategic priorities, drive the corporate’s continued progress and simplify the investor relations story.”
Within the proposed transaction, Liberty would separate LSXM “by way of a redemptive split-off of a newly shaped subsidiary of Liberty (“SplitCo”), which might personal the entire belongings and liabilities attributed to LSXM,” the agency stated. “Within the split-off, holders of every collection of LSXM frequent inventory would obtain plenty of shares of a single collection of frequent inventory of SplitCo calculated based mostly upon every underlying share of SiriusXM frequent inventory held by SplitCo being exchanged for 1.05 shares of frequent inventory of New SiriusXM. SplitCo would then mix with SiriusXM to kind New SiriusXM, with the minority shareholders of SiriusXM receiving shares in New SiriusXM on a one-for-one foundation.”
As well as, minority shareholders of SiriusXM would obtain a pro-rata money fee calculated based mostly on the quantity of the excellent internet debt of LSXM assumed by New SiriusXM within the proposed transaction. “New SiriusXM would have a single excellent collection of frequent inventory, with every share entitling the holder thereof to 1 vote per share,” Liberty defined. “By the use of instance, based mostly on latest excellent share counts, holders of LSXM frequent inventory would obtain 10.3 shares of New SiriusXM frequent inventory for every share of LSXM frequent inventory held at closing, and, based mostly on the projected excellent principal quantity of LSXM internet debt at year-end, the minority shareholders of SiriusXM would obtain one share of New SiriusXM frequent inventory plus $0.55 in money for every share of SiriusXM frequent inventory held at closing.”
In traditional Malone trend, the proposed transaction is structured to be tax-free, besides with respect to any money acquired. It will be topic to, amongst different issues, “the negotiation and execution of mutually acceptable definitive transaction paperwork and relevant board approvals, together with the approval of a particular committee,” Liberty stated. “No additional updates on the proposed transaction might be supplied except and till definitive paperwork are executed or discussions between the events terminate.”
The proposed deal wouldn’t end in any modifications to Liberty Media’s Liberty System One monitoring inventory or the Liberty Stay monitoring inventory group.
