Liberty Media proposes offering of convertible senior notes

Liberty Media Corporation has announced its intention to offer $500 million aggregate principal amount of convertible senior notes in a private offering. The company has also granted the initial purchasers an option to purchase up to an additional $75 million principal amount of Notes within a 13-day settlement period following the initial issuance. The Notes will be convertible into shares of Liberty’s Series A Liberty SiriusXM common stock (LSXMA), with settlement options including shares, cash, or a combination of both.

The Notes will be senior, unsecured obligations of Liberty, with interest payable semi-annually in arrears. The interest rate, initial conversion rate, and other terms will be finalized at the time of pricing. Liberty plans to use the net proceeds from the offering, along with cash on hand and borrowings under its margin loan, to repurchase its existing 1.375% cash convertible notes due 2023 and to settle or redeem its 2.125% exchangeable senior debentures due 2048.

The company anticipates that the number of shares of LSXMA into which the Notes would be convertible will be less than the number of shares underlying the outstanding 1.375% Cash Convertible Notes. This calculation is based on the last reported sale price of $31.44 per share of LSXMA on March 6, 2023, and an aggregate principal amount of $575 million (assuming the initial purchasers exercise their option to purchase additional Notes).

In connection with the offering, Liberty expects to proportionally terminate and unwind related bond hedges and warrants. Financial intermediaries may also engage in derivative transactions involving shares of LSXMA, FWONA, and BATRA, which could influence the market price of these securities.

The Notes will not be registered under the Securities Act of 1933 or any state securities laws and will be offered solely to Qualified Institutional Buyers under Rule 144A. Liberty has also issued forward-looking statements regarding the offering, noting that actual results may differ due to market conditions and other factors.

This offering is part of Liberty’s broader strategy to manage its debt structure and optimize capital resources. The company operates across three tracking stock groups: the Liberty SiriusXM Group, the Braves Group, and the Formula One Group.