Sirius XM & Liberty Media (LSXMA) announce transaction to simplify ownership structure of SiriusXM (5.02)
- Co announced that they have entered into definitive agreements whereby Liberty Media's Liberty SiriusXM tracking stock group will be combined with SiriusXM to create a new public company,. 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".
- 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.
- 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.
- 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.
- 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