Liberty Media proposes to combine Liberty SiriusXM with Sirius XM

In a regulatory filing, Liberty Media disclosed that on September 22, Liberty Media communicated a proposal to the Special Committee of the Board of Directors of Sirius XM (SIRI) which outlined the terms of a proposed combination of Liberty Media’s Liberty SiriusXM tracking stock group (LSXMA) with Sirius XM to form a new, consolidated public company. “In the proposed Combination, the Reporting Person would separate LSXM by means of a redemptive split-off of a newly formed subsidiary of Liberty, ‘SplitCo,’ which would own all of the assets and liabilities then attributed to LSXM. In the Split-Off, holders of each series of LSXM common stock would receive a number of shares of a single series of common stock of SplitCo calculated based upon each underlying share of Common Stock held by SplitCo being exchanged for 1.05 shares of New SiriusXM common stock. SplitCo would then combine with the Issuer to form New SiriusXM, with the minority shareholders of the Issuer receiving shares in New SiriusXM on a one-for-one basis. In addition, the minority shareholders of the Issuer 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. New SiriusXM would have a single outstanding series of common stock, with each share entitling the holder thereof to one vote per share. By way of example, based on recent outstanding share counts, holders of LSXM common stock would receive 10.3 shares of New SiriusXM common stock for each share of LSXM common stock held at closing, and, based on the projected outstanding principal amount of LSXM net debt at year end, the minority shareholders of the Issuer would receive 1 share of New SiriusXM common stock plus $0.55 in cash for each share of Common Stock held at closing. The minority shareholders of the Issuer would collectively own approximately 16% of New SiriusXM, and the former holders of LSXM common stock would collectively own approximately 84% of New SiriusXM. The Combination is intended to be tax-free, except with respect to any cash received, and would be subject to, among other things, the negotiation and execution of mutually acceptable definitive transaction documents and applicable board approvals, including the approval of a Special Committee. No further updates on the Proposal or the proposed Combination will be provided unless and until definitive documents are executed or discussions between the parties terminate, or unless otherwise required by applicable law,” the filing stated.