Liberty SiriusXM Tracking Stock Group Will
Combine with SiriusXM and Form a New Public Company
Transaction Builds on SiriusXM's Durable
Foundation and Positions Company to Drive Growth and Create
Stockholder Value
Liberty and SiriusXM to Host Conference Call
Today at 8:30 AM ET
ENGLEWOOD, Colo. and NEW YORK, Dec. 12,
2023 /PRNewswire/ -- Liberty Media Corporation
("Liberty Media" or "Liberty") (NASDAQ: LSXMA, LSXMB, LSXMK, FWONA,
FWONK, LLYVA, LLYVK) and Sirius XM Holdings Inc. (NASDAQ: SIRI)
("SiriusXM" or the "Company"), the leading audio entertainment
company in North America, today
announced that they have entered into definitive agreements whereby
Liberty Media's Liberty SiriusXM tracking stock group (NASDAQ:
LSXMA, LSXMB and LSXMK) (collectively "LSXM"), will be combined
with SiriusXM to create a new public company ("New SiriusXM"),
which will continue to operate under the SiriusXM name and brand.
New SiriusXM will have a single outstanding series of common stock
and is expected to continue to be traded on the Nasdaq Global
Select Market under the ticker symbol "SIRI".
"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 Greg Maffei, Liberty
President & CEO. "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."
"We are pleased that the Special Committee of our Board of
Directors has reached this agreement with Liberty Media, which will
allow SiriusXM to enter its next phase of value creation," said
Jennifer Witz, Chief Executive
Officer of SiriusXM. "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 Special Committee of the SiriusXM Board of Directors, along
with our independent advisors, has carefully and diligently
evaluated Liberty Media's proposal and negotiated this transaction.
We believe that the agreement we reached with Liberty Media is in
the best interests of the Company and its stockholders," said
Eddy Hartenstein, member of the
Special Committee and Lead Independent Director of the SiriusXM
Board. "With this transaction, SiriusXM will be well positioned to
continue creating value for stockholders."
Transaction Benefits
The transaction 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.
New SiriusXM will have a simplified ownership structure and
benefit from greater strategic flexibility and independence. It
also provides New SiriusXM with access to a broader investor base
and expanded opportunities for index inclusion. The additional
float provided by the transaction is also expected to improve
trading liquidity for New SiriusXM stockholders.
The transaction offers all stockholders the opportunity to
participate directly in the long-term potential of the leading
audio-entertainment company in North
America.
Transaction Details
Under the terms of the transaction, Liberty will separate LSXM
by means of a redemptive split-off of a new subsidiary of Liberty
("SplitCo"), which will hold its shares of SiriusXM and
approximately $1.7 billion of
estimated attributed net liabilities. Such net liabilities include
LSXM's net debt (3.75% LSXMA convertible notes due 2028, 2.75% SIRI
exchangeable bonds due 2049 and SIRI margin loan, net of corporate
cash)1, as well as other liabilities for transaction
fees and expenses, financing fees, litigation related liabilities
and other corporate adjustments. In the split-off, holders of each
series of LSXM common stock will receive a number of shares of
SplitCo stock equal to the Exchange Ratio, calculated as described
below, such that LSXM stockholders receive 1 share of New SiriusXM
for each share of SiriusXM previously held at LSXM, adjusted for
LSXM net liabilities. A wholly owned subsidiary of SplitCo will
then merge with SiriusXM, and existing SiriusXM stockholders (other
than Liberty Media) will receive 1:1 shares of SplitCo, which will
become New SiriusXM. The transaction is intended to be tax-free to
LSXM stockholders (except with respect to any cash received in lieu
of fractional shares) and SiriusXM stockholders.
The Exchange Ratio will be calculated based on (i) the number of
shares of SiriusXM held by Liberty, reduced by a net liabilities
share adjustment (the "Net Liabilities Share Adjustment"), divided
by (ii) the number of adjusted fully diluted shares of LSXM.
Liberty Media currently holds 3,205.8 million shares of SiriusXM
attributed to LSXM. The Net Liabilities Share Adjustment to the
Exchange Ratio will be determined as the amount of assumed LSXM net
debt (excluding the 3.75% LSXMA convertible notes due 2028), with
additional adjustments for transaction fees and expenses, financing
fees, litigation related liabilities and other corporate
adjustments, divided by the SiriusXM share price of $4.23, which represents the average of the
SiriusXM daily volume-weighted average prices over the 20
consecutive trading days ending September
25, 2023, the day before Liberty filed a 13D relating to a
transaction.
The adjusted fully diluted shares of LSXM will be calculated
based on outstanding LSXM shares at closing, including the dilutive
impact of shares underlying the 3.75% LSXMA convertible notes due
2028 and the dilutive impact of equity awards.
If the Net Liabilities Share Adjustment and the adjusted fully
diluted shares of LSXM were calculated as of June 30, 2024, the Exchange Ratio is estimated to
be approximately 8.4 shares in New SiriusXM for each share of LSXM
held.
Pro forma for the transaction, and assuming the adjustment
described above, at June 30, 2024,
there will be approximately 3,392 million basic shares outstanding
of New SiriusXM, of which former LSXM stockholders will own
approximately 81% of New SiriusXM, with the SiriusXM minority
stockholders owning the remaining 19%.
New SiriusXM will remain committed to the business' long-term
target leverage ratio of low-to-mid 3x adjusted EBITDA.
SiriusXM has secured committed financing with availability of
$1.1 billion from Morgan Stanley,
Bank of America and J.P. Morgan, the net proceeds of which may be
used to refinance Liberty Media's 2.75% Exchangeable Notes due 2049
and the existing Liberty Media margin loan secured by SiriusXM's
common stock.
The transaction has been unanimously approved by Liberty's
Board, the SiriusXM Special Committee and SiriusXM's Board of
Directors. Greg Maffei is expected
to be Chairman of the Board of New SiriusXM. The transaction is
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. Certain trusts affiliated with John Malone, the Chairman of Liberty Media, have
entered into a voting agreement pursuant to which they have
committed to vote their shares of LSXM in favor of the transaction.
A subsidiary of Liberty Media owning a majority of the outstanding
shares of SiriusXM has delivered a written consent approving the
transaction on behalf of SiriusXM stockholders. The transaction
will not result in any changes to the Liberty Formula One tracking
stock group or the Liberty Live tracking stock group.
Shaping the Future of Audio
New SiriusXM is poised to drive growth and create value:
- Leaning into the Company's live, human curated audio
experiences: SiriusXM is an innovative content company and
leader in providing a differentiated blend of live, human curated
and artist-hosted radio, exclusive talk programming, podcasts and
news, sports and more.
- Leading subscription business positioned for the future:
SiriusXM has more than 155 million SiriusXM-enabled vehicles on the
road, 34 million paid subscribers with near record low churn and
continues to roll out its 360L platform and expand its electric
vehicle footprint. In addition, with the launch of its next
generation platform, the Company is focused on delivering a
unified, personalized experience in- and out-of-vehicle by creating
seamless listening experiences, with greater personalization and
content discovery for consumers anywhere they choose to
listen.
- Tapping into new audiences to grow with its next generation
platform: SiriusXM is doubling-down on its differentiated
content, while enhancing its value proposition with a modernized
brand, new app experience, and an attractive new price point for
streaming-only subscribers. Through its new next generation
platform, SiriusXM is poised to retain its loyal core audience of
listeners and capture demand from new growth audiences that are
younger, more diverse and willing to pay for multiple
services.
- Capturing opportunities in ad-based platforms: SiriusXM
commands a significant audience, reaching over 150 million monthly
listeners across SiriusXM, Pandora and its broader podcast and
off-platform ad network. The Company generates over $1.8 billion in advertising revenue and continues
to invest in advertising capabilities, creating a unique value
proposition for advertisers to reach its scaled and diverse
listener base.
- Consistently delivering strong results and capital
returns: SiriusXM continues to generate high EBITDA margins and
steady free cash flow that support the Company's ability to invest
in long-term growth and rapidly de-lever, while also returning
capital to stockholders. The Company does not expect any change to
its existing dividend policy while de-emphasizing repurchases until
it reaches its long standing leverage target of low-to-mid 3x
adjusted EBITDA. Over the last three years, SiriusXM has returned
approximately $4.4 billion to
stockholders through a combination of dividends, special dividends
and share repurchases. The Company has no bond maturities until
2026 and expects to end 2023 with approximately $2 billion of available liquidity, plus committed
financing of another $1.1 billion in
support of this transaction.
Joint Investor Call
Liberty Media and SiriusXM will hold a joint investor conference
call and webcast at 8:30 AM ET to
discuss the details of the transaction. To participate via
telephone, please dial 877.407.4019 (Toll-free) or +1.201.689.8337
(Local) 10 minutes prior to the start of the call and ask to be
connected to the SiriusXM conference call. A webcast of the
presentation will be available on the Investor Relations section of
the SiriusXM website at siriusxm.com/investorrelations. A replay of
the call will be accessible on each company's Investor Relations
webpage within 24 hours of the conclusion after any necessary
filings have been made with the SEC.
Advisors
J.P. Morgan is acting as financial advisor to Liberty Media, and
O'Melveny & Myers LLP is acting as legal counsel. Morgan
Stanley & Co. LLC is acting as financial advisor to SiriusXM,
and Simpson Thacher & Bartlett LLP is acting as legal counsel.
Solomon Partners is acting as financial advisor to the SiriusXM
Special Committee and Debevoise & Plimpton LLP is acting as
legal counsel.
Cautionary Note Regarding Forward-Looking Statements
This press release includes certain forward-looking statements
within the meaning of the Private Securities Litigation Reform Act
of 1995, including certain statements relating to the completion of
the proposed transaction, proposed trading of SplitCo common stock
and other matters related to such proposed transaction. All
statements other than statements of historical fact are
"forward-looking statements" for purposes of federal and state
securities laws. These forward-looking statements generally can be
identified by phrases such as "possible," "potential," "intends" or
"expects" or other words or phrases of similar import or future or
conditional verbs such as "will," "may," "might," "should,"
"would," "could," or similar variations. These forward-looking
statements involve many risks and uncertainties that could cause
actual results and the timing of events to differ materially from
those expressed or implied by such statements, including, but not
limited to: historical financial information may not be
representative of future results; there may be significant
transaction costs and integration costs in connection with the
proposed transaction (including significant tax liability); the
parties may not realize the potential benefits of the proposed
transaction in the near term or at all; an active trading market
for SplitCo common stock may not develop; the uncertainty of the
market value of the SplitCo common stock; the satisfaction of all
conditions to the proposed transaction; the proposed transaction
may not be consummated; Liberty Media and SiriusXM may need to use
resources that are needed in other parts of its business to do so;
there may be liabilities that are not known, probable or estimable
at this time; the proposed transaction may result in the diversion
of management's time and attention to issues relating to the
proposed transaction and integration; unfavorable outcome of legal
proceedings that may be instituted against Liberty Media and/or
SiriusXM following the announcement of the proposed transaction;
risks related to disruption of management time from ongoing
business operations due to the proposed transaction; risks inherent
to the business may result in additional strategic and operational
risks, which may impact Liberty Media, SplitCo and/or SiriusXM's
risk profiles, which each company may not be able to mitigate
effectively; and other risks and uncertainties detailed in periodic
reports that Liberty Media and SiriusXM file with the SEC. These
forward-looking statements speak only as of the date of this press
release, and Liberty Media and SiriusXM expressly disclaim any
obligation or undertaking to disseminate any updates or revisions
to any forward-looking statement contained herein to reflect any
change in Liberty Media's or SiriusXM's expectations with regard
thereto or any change in events, conditions or circumstances on
which any such statement is based. Please refer to the publicly
filed documents of Liberty Media and SiriusXM, including their most
recent Forms 10-K and 10-Q, as such risk factors may be amended,
supplemented or superseded from time to time by other reports
Liberty Media or SiriusXM subsequently file with the SEC, for
additional information about Liberty Media and SiriusXM and about
the risks and uncertainties related to Liberty Media's and
SiriusXM's businesses which may affect the statements made in this
press release.
Additional Information
Nothing in this press release shall constitute a solicitation to
buy or an offer to sell shares of common stock of Liberty Media,
SiriusXM or SplitCo. The proposed offer and issuance of shares of
SplitCo common stock in the proposed transactions will be made only
pursuant to an effective registration statement on Form S-4,
including a proxy statement of Liberty Media, prospectus of
SplitCo, and information statement of SiriusXM. LIBERTY MEDIA AND
SIRIUSXM STOCKHOLDERS AND OTHER INVESTORS ARE URGED TO READ THE
REGISTRATION STATEMENT WHEN IT IS AVAILABLE, TOGETHER WITH ALL
RELEVANT SEC FILINGS REGARDING THE PROPOSED TRANSACTION, AND ANY
OTHER RELEVANT DOCUMENTS FILED AS EXHIBITS THEREWITH, AS WELL AS
ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. After
the registration statement is declared effective, the proxy
statement/prospectus/ information statement and other relevant
materials for the proposed transaction will be mailed to all
Liberty Media and SiriusXM stockholders. Copies of these SEC
filings will be available, free of charge, at the SEC's website
(http://www.sec.gov). Copies of the filings together with the
materials incorporated by reference therein will also be available,
without charge, by directing a request to Liberty Media
Corporation, 12300 Liberty Boulevard, Englewood, Colorado 80112, Attention: Investor
Relations, Telephone: (877) 772-1518 or Sirius XM Holdings Inc.,
1221 Avenue of the Americas, 35th Floor, New York, New York 10021, Attention: Investor
Relations, (212) 584-5100.
Participants in a Solicitation
Liberty Media anticipates that the following individuals will be
participants (the "Liberty Media Participants") in the solicitation
of proxies from holders of Liberty Media's LSXMA and LSXMB common
stock in connection with the proposed transaction: John C. Malone, Chairman of the Liberty Media
Board of Directors, Robert R.
Bennett, Derek Chang,
Brian M. Deevy, M. Ian G. Gilchrist, Evan
D. Malone, Larry E. Romrell,
and Andrea L. Wong, all of whom are
members of the Liberty Media Board of Directors, Gregory B. Maffei, Liberty Media's President,
Chief Executive Officer and Director, and Brian J. Wendling, Liberty Media's Chief
Accounting Officer and Principal Financial Officer. Information
regarding the Liberty Media Participants, including a description
of their direct or indirect interests, by security holdings or
otherwise, can be found under the caption "Security Ownership of
Certain Beneficial Owners and Management—Pro Forma Security
Ownership of Management of Liberty Media Following the
Reclassification" contained in Liberty Media's registration
statement on Form S-4 (the "S-4"), which was filed with the SEC on
June 8, 2023 and is available
at: https://www.sec.gov/Archives/edgar/data/1560385/000110465923069028/tm2232384-33_s4a.htm.
To the extent that certain Liberty Media Participants or their
affiliates have acquired or disposed of security holdings since the
"as of" date disclosed in the S-4, such transactions have been or
will be reflected on Statements of Change in Ownership on Form 4 or
amendments to beneficial ownership reports on Schedules 13D filed
with the SEC, which are available
at: https://www.sec.gov/edgar/browse/?CIK=1560385&owner=exclude.
Additional information regarding the Liberty Media Participants in
the proxy solicitation and a description of their interests will be
contained in the proxy statement for Liberty Media's special
meeting of stockholders and other relevant materials to be filed
with the SEC in respect of the contemplated transactions when they
become available. These documents can be obtained free of charge
from the sources indicated above.
SiriusXM anticipates that the following individuals will be
participants (the "SiriusXM Participants") in the solicitation of
proxies from holders of Liberty Media's LSXMA and LSXMB common
stock in connection with the proposed transaction Gregory B. Maffei, Chairman of the SiriusXM
Board of Directors, David A. Blau,
Eddy W. Hartenstein, Robin P. Hickenlooper, James P. Holden, Evan D.
Malone, James E. Meyer,
Jonelle Procope, Michael Rapino, Kristina
M. Salen, Carl E. Vogel and
David Zaslav, all of whom are
members of SiriusXM's Board of Directors, Jennifer Witz, SiriusXM's Chief Executive
Officer and Director and Thomas D.
Barry, SiriusXM's Chief Financial Officer. Information
regarding the SiriusXM Participants, including a description of
their direct or indirect interests, by security holdings or
otherwise, can be found under the caption "Stock Ownership"
contained in Sirius XM's definitive proxy statement for its 2023
annual meeting of stockholders (the "2023 Proxy Statement"), which
was filed with the SEC on April 21,
2023 and is available
at: https://www.sec.gov/ix?doc=/Archives/edgar/data/908937/000093041323001281/c105679_def14a-ixbrl.htm.
To the extent that certain SiriusXM Participants or their
affiliates have acquired or disposed of security holdings since the
"as of" date disclosed in the 2023 Proxy Statement, such
transactions have been or will be reflected on Statements of Change
in Ownership on Form 4, which are available
at: https://www.sec.gov/edgar/browse/?CIK=908937&owner=exclude.
Additional information regarding certain of the SiriusXM
Participants in the proxy solicitation and a description of their
interests will be contained in the information statement and other
relevant materials to be filed with the SEC in respect of the
contemplated transactions when they become available. These
documents can be obtained free of charge from the sources indicated
above.
About Liberty Media Corporation
Liberty Media Corporation operates and owns interests in a broad
range of media, communications and entertainment businesses. Those
businesses are attributed to three tracking stock groups: the
Liberty SiriusXM Group, the Formula One Group and the Liberty Live
Group. The businesses and assets attributed to the Liberty SiriusXM
Group (NASDAQ: LSXMA, LSXMB, LSXMK) include Liberty Media's
interest in SiriusXM. The businesses and assets attributed to the
Formula One Group (NASDAQ: FWONA, FWONK) include Liberty Media's
subsidiary Formula 1 and other minority investments. The businesses
and assets attributed to the Liberty Live Group (NASDAQ: LLYVA,
LLYVK) include Liberty Media's interest in Live Nation and other
minority investments.
About Sirius XM Holdings Inc.
SiriusXM is the leading audio entertainment company in
North America with a portfolio of
audio businesses including its flagship subscription entertainment
service SiriusXM; the ad-supported and premium music streaming
services of Pandora; an expansive podcast network; and a suite of
business and advertising solutions. Reaching a combined monthly
audience of approximately 150 million listeners, SiriusXM offers a
broad range of content for listeners everywhere they tune in with a
diverse mix of live, on-demand, and curated programming across
music, talk, news, and sports. For more about SiriusXM, please go
to: www.siriusxm.com.
Contacts
Liberty Media
Shane Kleinstein
(720) 875-5432
SiriusXM
Investor contacts:
Hooper Stevens
212-901-6718
hooper.stevens@siriusxm.com
Natalie Candela
212-901-6672
natalie.candela@siriusxm.com
Media contact:
Jessica Casano-Antonellis
Jessica.casano@siriusxm.com
1 Estimated as of June 30,
2024. Based on figures as of September 30, 2023, adjusted for retirement of
remaining $199 million principal
amount of 1.375% cash convertible notes in October 2023, settlement of BATRK stake
monetized in debt-for-equity exchange in November 2023, estimated dividends to be received
from SiriusXM and estimated interest payments on remaining
debt.
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SOURCE Sirius XM Holdings Inc.; Liberty Media Corporation
