Liberty Media and Sirius XM Satellite Announce Merger Consistent With Initial Announcement, Modest Impact on SIRI Credit

Credit Research: Michael McCaffery, CFA Relevant Items: Liberty Media & Sirius XM Announce Merger 8-K Liberty Media & Sirius XM Announce Merger Slides Sirius XM Satellite Q3’23 10-Q Liberty Media Q3’23 10-Q Liberty Media Initial Proposal for Sirius XM Announcement Sirius XM Satellite Initiation   Key Takeaways   Consistent with our thesis when we initiated coverage on Sirius XM Satellite in August, Liberty Media and Sirius Satellite today announced a transaction to merge Liberty Sirius XM Satellite, which holds its approximately 84% stake in Sirius XM Satellite, with Sirius XM Satellite.   The proposed transaction would be tax-free for shareholders and add about half a turn of leverage to the Sirius XM credit, from roughly 3.3x to about 3.9x, by the anticipated mid-2024 deal close.   Key Deal Terms   Each series of Liberty Sirius XM Satellite, or LSXM, common stock would receive 8.4 shares of “New SiriusXM.”   Minority shareholders of SiriusXM would receive shares in “New SiriusXM” on a one-for-one basis.   Unlike the original Liberty Media proposal, this transaction will not include any special dividend to the minority shareholders of SiriusXM.   Pro Forma Leverage, as anticipated at deal close will be about 3.9x, roughly a half[...]