SiriusXM to Combine With Liberty Media Tracking Stock Group

Georg Szalai
·3 min read
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Liberty Media’s Liberty SiriusXM tracking stock group will combine with satellite radio and audio entertainment giant SiriusXM to create a new public company, dubbed “New SiriusXM,” which will continue to operate under the SiriusXM brand, the companies said on Tuesday.

Liberty, led by president and CEO Greg Maffei and chairman John Malone, owned an 83 percent stake in SiriusXM as of July 31. Liberty, led by president and CEO Greg Maffei and chairman John Malone, says on its website that it owned an 83 percent stake in Sirius XM as of July 31.

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New SiriusXM shares are expected to continue to be traded on the Nasdaq Global Select Market under the ticker symbol “SIRI.” The deal simplifies the ownership structure of SiriusXM and follows a September proposal submitted by Liberty.

“We have reached an important milestone in Liberty’s ownership of SiriusXM. This combination will create value for all stockholders by eliminating the tracking stock structure, enhancing liquidity and allowing former LSXM stockholders to participate directly in the ongoing performance of SiriusXM,” said Maffei. “SiriusXM commands the largest paid share-of-ear in the car and has proven itself as an incredibly successful and profitable business. We are confident SiriusXM will continue to create value by building on its resilient business model to execute its strategic initiatives. We look forward to remaining meaningfully involved in the business and significant stockholders.”

SiriusXM CEO Jennifer Witz said the deal “will allow SiriusXM to enter its next phase of value creation.” She added: “In a highly fragmented audio entertainment industry, SiriusXM has differentiated itself as the leading audio entertainment provider by creating an experience centered on our high-quality, premium, human-curated radio that is more relevant than ever. In doing so, we have built a profitable business that is poised for continued success. With our strong foundation and as we roll out our next-generation platform, we are transforming SiriusXM to drive long-term growth and stockholder value creation.”

The transaction has been unanimously approved by Liberty’s board, the SiriusXM board’s special committee and SiriusXM’s board of directors. Maffei is expected to be chairman of the board of New SiriusXM, with the transaction expected to be completed early in the third quarter of 2024, “subject to approval by a majority of the aggregate voting power of the shares of Liberty SiriusXM common stock present, whether in-person or by proxy, at a stockholder meeting, the receipt by Liberty Media and New SiriusXM of tax opinions from their respective tax counsel, as well as the receipt of required regulatory approvals and the satisfaction of other customary closing conditions.”

Trusts affiliated with Malone have entered into a voting agreement via which they commit to voting their LSXM shares in favor of the transaction.

SiriusXM and Liberty noted several benefits of the transaction. It will result in New SiriusXM being an independent public company, “with no majority stockholder, a single class of shares and a board comprising a majority of independent directors,” the said.

It will also have a simplified ownership structure and “benefit from greater strategic flexibility and independence,” while ensuring “access to a broader investor base and expanded opportunities for [stock] index inclusion.” And the companies said: “The additional [stock] float provided by the transaction is also expected to improve trading liquidity for New SiriusXM stockholders.”

Overall, the deal “offers all stockholders the opportunity to participate directly in the long-term potential of the leading audio-entertainment company in North America,” the firms said.

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