Why Sirius XM Stock Is Sliding Tuesday

Sirius XM Holdings Inc SIRI shares are trading lower Tuesday after Liberty Media Corp LSXMA proposed a business combination with the company.

What Happened: Liberty Media sent a proposal to the special committee of the board of Sirius XM, outlining the terms of a proposed business combination. 

Under terms of the proposal, Liberty would separate LSXM by means of a redemptive split-off of a newly formed subsidiary, which would own all of LSXM's assets and liabilities. Sirius XM shareholders would receive one share of the New Sirius XM common stock and 55 cents per share in cash for each share of Sirius XM held at closing.

"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," said Greg Maffei, president and CEO of Liberty Media.

"SiriusXM minority shareholders will also benefit from enhanced trading dynamics, including increased liquidity and likelihood of future index inclusion."

Sirius XM said its board is currently evaluating the proposal. 

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SIRI Price Action: Sirius XM shares were down 12.9% at $3.49 at the time of publication, according to Benzinga Pro.

Photo: courtesy of Pexels from Pixabay.