Liberty Media Proposes Merger to Create New SiriusXM Public Company
Shares of Liberty Media Corp.'s Liberty Sirius XM tracking stock LSXMA shot up 11.6% in premarket trading, while Sirius XM Holdings Inc.'s stock SIRI slid 4.5% toward a three-month low. This comes after Liberty Media announced its proposed merger of the two stocks to form a new public company named New SiriusXM.
Under the proposed deal, Liberty would separate LSXMA into a newly formed subsidiary of Liberty. Holders of each series of LSXMA common stock would receive shares of a single series of shares based on each underlying share of SiriusXM common stock held by the new subsidiary. This exchange rate would be 1.05 shares of common stock of New SiriusXM for every underlying share of SiriusXM common stock.
The creation of the new subsidiary would then lead to the merger with SiriusXM, resulting in the formation of New SiriusXM. Liberty's Chief Executive, Greg Maffei, stated that "Liberty's proposal rationalizes the dual corporate structure between LSXMA and SiriusXM and provides value to all shareholders with a more flexible and attractive currency in New SiriusXM." He further added that "SiriusXM minority shareholders will also benefit from enhanced trading dynamics, including increased liquidity and likelihood of future index inclusion."
As of Monday, LSXMA's stock has shed 21.6% year-to-date, while SiriusXM shares have dropped 31.3%. In contrast, the S&P 500 has gained 13.0%.
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