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Liberty Media Calls Off Sirius XM Takeover

Stocks in this article: LMCA SIRI CHTR TWC LYV BKS

NEW YORK (The Deal) -- Buried in a statement about the creation of tracking stocks, Liberty Media  (LMCA) said that it is withdrawing a bid to acquire minority shares of satellite radio group Sirius XM Holdings (SIRI) for about $10.4 billion.

"In light of the tracking stock distribution, our offer for Sirius XM is no longer applicable," explained Liberty CEO Greg Maffei in a press release.

In January, John Malone's media group offered to pay $3.86 worth of non-voting Series C Liberty stock for each share of Sirius. The deal valued the 2.8 billion minority shares at about $10.4 billion, and valued Sirius XM's nearly 6.1 million in total equity at about $22.4 billion.

When announcing the offer in January, Maffei said that purchasing the remaining shares of Sirius XM would increase Liberty's "financial and strategic flexibility."

Now that Liberty-backed Charter Communications  (CHTR) has been spurned in its offer for Time Warner Cable (TWC), Malone may feel less urgency to boost liquidity by rolling up Sirius XM.

As part of the restructuring, Liberty Media's assets will be attributed to either the to-be-created Liberty Media Group tracking stock or to the Liberty Broadband Group tracker.

Liberty Broadband Group will reflect the company's stakes in Charter Communications, Time Warner Cable and geo-location technology company TruePosition. The Liberty Media tracker will represent the positions in SiriusXM, Live Nation Entertainment (LYV) and Barnes & Noble (BKS) and others.

Investors holding Liberty's A and B series common stock will receive one share of Liberty Media and four shares of Liberty Broadband.

Malone has frequently created tracking stocks as a prelude to a formal spinoff of a group of assets.

Liberty said Thursday it would engage with a special committee of Sirius XM's board. "We remain enthusiastic owners of 53% of Sirius XM," Maffei said.

In after hours trading, Sirius XM shares dropped 8 cents, or 2.67 %, to $3.28 each. The stock recovered early Friday, trading at $3.44 per share.

Liberty gained 89 cents, or 0.7%, after hours, to $127.03 per share. Its stock continued to climb, hitting $136.72 Friday morning.

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