Liberty Media‘s Liberty SiriusXM tracking stock group and the satellite radio firm have reached an agreement to merge into a newly structured public company.
The new SiriusXM will continue to operate under the company’s existing name and brand. It will continue to have a common stock traded on the Nasdaq Global Select Market. Liberty’s tracking stock group would own 81% of the new entity, with SiriusXM owning the rest. The merger is expected to close early in the third quarter of 2024.
SiriusXM, known for a talent roster headed by Howard Stern, is in the midst of a strategic transition to a new app and a deeper roster of A-list podcast hosts. The company hosted an investor presentation last month, with execs joined by Stern, Kevin Hart, Kelly Clarkson and other talent. With 34 million paid subscribers, Sirius remains a dominant player in vehicles, but its plan for its newly designed mobile app is to bridge the audio experience in cars with consumer activity during the rest of the day.
Tracking stocks are equities issued by a company that track the performance of a particular part of that company. Liberty’s holdings, which include the Atlanta Braves baseball team, Formula 1 and stakes in Live Nation and Charter Communications, are diversified. Tracking stocks are designed to enable investors to zero in on a particular division of a diversified company. The SiriusXM merger plan would do away with tracking stocks that had been set up to track the satellite radio firm.
The transaction, first proposed by the John Malone-controlled Liberty in September, will create an independent public company whose board would consist of mostly independent directors.
In a press release, Liberty CEO called the proposed deal “an important milestone in Liberty’s ownership of SiriusXM,” adding that the management team is “confident SiriusXM will continue to create value by building on its resilient business model to execute its strategic initiatives.”
Sirius CEO Jennifer Witz said the deal will “allow SiriusXM to enter its next phase of value creation.”
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