The decision comes nearly five years after Liberty Media -- chaired byJohn Malone -- took a 40% stake in SiriusXM through a lifesaving $530 million capital infusion into the satellite radio leader. Over subsequent years, Liberty Media has increased its holding in SiriusXM as the company rebounded from the verge of bankruptcy, became profitable and generated positive cash flows. Nearly a year ago, Liberty Media built its stock ownership of SiriusXM to a controlling interest.
Now the media giant is seeking to consolidate the SiriusXM into its own finances as a wholly owned subsidiary.
The company said in a Friday press release that it would seek to convert public shares of SiriusXM into Liberty Media shares. Were a deal to be done on the terms that Liberty Media announced on Friday, current SiriusXM shareholders would own approximately 39% of Liberty Media's outstanding stock. The combined company would have a stock market capitalization of $27 billion, Liberty Media said.
Friday's deal values SiriusXM shares at $3.68 apiece, according to a press release, a modest premium to Thursday closing share prices.
"Our proposal will allow Sirius public shareholders to convert from a non-controlling stake in a subsidiary into a direct equity position in Liberty, the parent company," Greg Maffei, Liberty Media's CEO, said in a statement.
"Sirius shareholders will continue to participate in Sirius' future prospects along with Liberty's broader portfolio of businesses and opportunities. We believe the combined company will have better access to capital and all of Liberty's shareholders - both its current shareholders and the Sirius shareholders who become Liberty shareholders as a result of the proposed transaction - will enjoy enhanced liquidity as shareholders of a $27 billion market capitalization company," Maffei added.