8-KOther EventsExhibits & Filings

Liberty Media Corp 8-K Report, Corporate Update (Jan 3, 2014)

Filed January 3, 2014For Securities:FWONKFWONAFWONB

Summary

This Form 8-K filing from Liberty Media Corporation (FWONK) on January 3, 2014, announces a significant strategic proposal concerning its investment in Sirius XM Holdings Inc. Liberty Media has formally proposed a transaction that would allow Sirius XM shareholders, excluding Liberty itself, to become direct shareholders of Liberty Media. This would be structured as a tax-free exchange where Sirius XM common stock would be converted into shares of a new Liberty Series C non-voting common stock. The proposal also includes a contemporaneous distribution of Liberty Series C common stock to existing Liberty Series A and B shareholders on a 2:1 basis. This dual action aims to facilitate a liquid trading market for the new Series C shares. If completed, the transaction would significantly alter Liberty Media's ownership structure, with former Sirius XM shareholders (excluding Liberty) owning approximately 39% of Liberty Media's pro forma common stock.

Key Highlights

  • 1Liberty Media proposed a tax-free transaction to merge Sirius XM shareholders (excluding Liberty) into Liberty Media.
  • 2Sirius XM shareholders would receive Liberty Series C non-voting common stock in exchange for their Sirius XM shares.
  • 3Liberty Media plans a 2:1 stock dividend of Series C shares to its existing Series A and B common stockholders to create liquidity.
  • 4The proposed transaction would result in Sirius XM shareholders (excluding Liberty) owning approximately 39% of Liberty Media post-transaction.
  • 5The transaction is subject to customary conditions, including negotiation of definitive agreements and approval by a special committee of independent Sirius XM directors.
  • 6A non-waivable condition requires approval from a majority of Sirius XM shares not owned by Liberty or its affiliates.
  • 7Liberty Media shareholder approval for the issuance of Series C stock would be required under Nasdaq rules.

Frequently Asked Questions

The main purpose of this filing is to announce Liberty Media Corporation's proposal to Sirius XM Holdings Inc. for a tax-free transaction that would allow minority Sirius XM shareholders to become direct shareholders of Liberty Media.

Sirius XM shareholders (other than Liberty) would receive shares in a new Liberty Series C non-voting common stock, making them direct owners of Liberty Media. This is intended to be a tax-free transaction, and the associated distribution of Series C shares by Liberty aims to create a liquid market for these new shares.

The transaction is contingent upon several conditions, including the negotiation and execution of definitive agreements, approval by a special committee of independent Sirius XM directors, approval by a majority of Sirius XM shares not owned by Liberty, and approval by Liberty Media shareholders for the issuance of Series C stock under Nasdaq rules.

The Liberty Series C common stock is a new class of non-voting common stock that Liberty Media intends to issue to Sirius XM shareholders as part of the proposed transaction. It will also be distributed to existing Liberty Media Series A and B shareholders to facilitate trading.