Liberty Media Corporation ("Liberty") LMCA announced today
that it has made a proposal to Sirius XM Holdings Inc. SIRI
("Sirius") that outlines the terms by which Sirius public shareholders would
become shareholders of Liberty in a tax-free transaction in which each share
of Sirius common stock would be converted into 0.0760 of a new share of
Liberty Series C common stock, and, immediately prior to such conversion,
Liberty intends to distribute, on a 2:1 basis, shares of Liberty's Series C
common stock to all holders of record of Liberty's Series A and B common stock
to create a liquid trading market for Liberty's Series C common stock. (The
foregoing exchange ratio would be equivalent to a 0.0253 exchange ratio prior
to the distribution of the Liberty Series C common stock dividend.) Upon the
completion of the proposed transaction, Liberty expects that Sirius' public
shareholders would own approximately 39% of Liberty's then-outstanding common
stock.
"Our proposal will allow Sirius public shareholders to convert from a
non-controlling stake in a subsidiary into a direct equity position in
Liberty, the parent company,” said Greg Maffei, Liberty's President & CEO.
“Sirius shareholders will continue to participate in Sirius' future prospects
along with Liberty's broader portfolio of businesses and opportunities. We
believe the combined company will have better access to capital and all of
Liberty's shareholders — both its current shareholders and the Sirius
shareholders who become Liberty shareholders as a result of the proposed
transaction — will enjoy enhanced liquidity as shareholders of a $27 billion
market capitalization company.”
“The proposed transaction is an important step in the growth of both
companies,” said John Malone, Liberty's Chairman. “It will enable us to focus
our energies on the pursuit of new opportunities across the expanded portfolio
of Liberty's businesses and to optimize our capital structure to produce the
maximum possible returns to all shareholders.”
The Series C common stock would be Liberty's largest and most liquid series of
stock. The proposed exchange ratio of 0.0760 would value Sirius common shares
at approximately $3.68 per share based on closing prices of Liberty's Series A
shares on Friday, January 3, 2014. This exchange ratio represents a 4.5%
premium to the exchange ratio implied by the closing prices of Liberty's
Series A and Sirius' shares on Thursday, January 2, 2014 and a 3.1% premium to
the exchange ratio implied by the closing share prices of Friday, January 3,
2014.
As explained in the proposal letter sent to Sirius, which will be filed
promptly with the SEC, the proposed transaction would be subject to the
negotiation and execution of mutually acceptable definitive transaction
documents, the terms of which would be approved by a special committee of
independent directors of Sirius, and would also be subject to a majority of
the minority vote of the Sirius public shareholders. The approval by the
Liberty shareholders of the issuance of the Series C common shares in the
proposed transaction would also be required under applicable Nasdaq Stock
Market requirements. Other than applicable filings with the Securities and
Exchange Commission, Liberty does not anticipate that any additional
regulatory approvals would be required.
Conference Call
Liberty Media will host a live webcast today at 5:00 p.m. ET (3:00 p.m. MT) to
discuss this announcement. Please call Premiere Conferencing at (888) 417-2254
or (719) 457-2647 at least 10 minutes prior to the call. Callers will need to
be on a touch-tone telephone to ask questions. The conference administrator
will provide instructions on how to use the polling feature.
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