Liberty Media Closes Private Offering of $450,000,000 of 1.0% Cash Convertible Senior Notes due 2023
January 23 2017 - 9:45PM
Business Wire
Liberty Media Corporation (“Liberty”) (Nasdaq: LSXMA, LSXMB,
LSXMK, BATRA, BATRK, LMCA, LMCK) announced today that it has closed
its previously announced private offering of $450,000,000 aggregate
principal amount of its 1.0% cash convertible senior notes due 2023
(the “notes”), including notes with an aggregate principal amount
of $50 million issued pursuant to the exercise of an option granted
to the initial purchasers.
The notes will mature on January 30, 2023 and will be
convertible, under certain circumstances, into cash based on the
trading prices of the underlying shares of Series C Liberty Media
common stock (“LMCK”). The initial conversion rate for the notes
will be 27.1091 shares of LMCK per $1,000 principal amount of
notes, equivalent to an initial conversion price of approximately
$36.89 per share of LMCK. All conversions of notes will be settled
in cash, and not through the delivery of any securities.
Liberty used a portion of the net proceeds of the offering to
fund an increase to the cash consideration paid to the selling
shareholders (the “Selling Shareholders”) of Formula 1 (“F1”) by
$400 million and retained in treasury the approximately 19 million
shares that would otherwise have been issuable to the Selling
Shareholders based on the per share purchase price of $21.26. These
LMCK shares have been reserved by Liberty for issuance to the F1
teams at a per share purchase price of $21.26. The aggregate number
of LMCK shares issued at the F1 closing did not change as a result
of this transaction. Only the allocation of the shares changed as
follows: approximately 56 million to the Selling Shareholders, 62
million to the third party investors and approximately 19 million
into treasury. To the extent such shares are not issued to the F1
teams within six months following the closing of the acquisition,
which was announced today, the shares will be retired. The
remaining net proceeds from the offering are attributed to the
Liberty Media Group balance sheet as cash.
Following the completion of the F1 acquisition and the financing
described above, approximate ownership of the equity of the Liberty
Media Group (to be renamed the Formula One Group) is comprised of
(1): 33% owned by the Selling Shareholders, 28% owned by the third
party investors pursuant to an agreement with Liberty announced on
December 14, 2016 and 38% owned by existing Liberty Media Group
shareholders.
The notes, as well as the associated cash proceeds, are
attributed to the Liberty Media Group. Pro forma for this financing
and the closing of the F1 acquisition, total debt attributed to the
Liberty Media Group includes the notes, $1 billion 1.375%
convertible notes due 2023, $445 million Time Warner Inc.
exchangeable debentures due 2046, $350 million drawn under a Live
Nation margin loan, $36 million of other corporate level debt as of
September 30, 2016 and approximately $4.1 billion of existing F1
debt as of July 31, 2016.
The notes have not been registered under the Securities Act of
1933, as amended (the “Securities Act”), or any state securities
laws and, unless so registered, may not be offered or sold in the
United States except pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the
Securities Act and applicable state securities laws. The notes were
offered by means of an offering memorandum solely to “Qualified
Institutional Buyers” pursuant to, and as that term is defined in,
Rule 144A of the Securities Act.
This press release does not constitute an offer to sell or the
solicitation of an offer to buy the notes nor shall there be any
sale of notes in any state in which such offer, solicitation or
sale would be unlawful prior to registration or qualification under
the securities laws of such state.
Forward-Looking Statements
This press release includes certain forward-looking statements
within the meaning of the Private Securities Litigation Reform Act
of 1995, including statements relating to the private offering of
notes and the potential issuance of LMCK shares to the F1 teams.
These forward-looking statements involve many risks and
uncertainties that could cause actual results to differ materially
from those expressed or implied by such statements, including,
without limitation, general market conditions. These
forward-looking statements speak only as of the date of this press
release, and Liberty expressly disclaims any obligation or
undertaking to disseminate any updates or revisions to any
forward-looking statement contained herein to reflect any change in
Liberty’s expectations with regard thereto or any change in events,
conditions or circumstances on which any such statement is based.
Please refer to the publicly filed documents of Liberty, including
its most recent Annual Report on Form 10-K and Quarterly Reports on
Form 10-Q, for risks and uncertainties related to Liberty’s
business which may affect the statements made in this press
release.
About Liberty Media Corporation
Liberty Media Corporation operates and owns interests in a broad
range of media, communications and entertainment businesses. Those
businesses are attributed to three tracking stock groups: the
Liberty SiriusXM Group, the Braves Group and the Liberty Media
Group. The businesses and assets attributed to the Liberty SiriusXM
Group (Nasdaq: LSXMA, LSXMB, LSXMK) include our interest in
SiriusXM. The businesses and assets attributed to the Braves Group
(Nasdaq: BATRA, BATRK) include our subsidiary Braves Holdings, LLC.
The businesses and assets attributed to the Liberty Media Group
(Nasdaq: LMCA, LMCK) consist of all of Liberty Media Corporation's
businesses and assets other than those attributed to the Liberty
SiriusXM Group and the Braves Group, including Formula 1, Liberty
Media’s interest in Live Nation Entertainment, and minority equity
investments in Time Warner Inc. and Viacom.
(1) Ownership percentages (i) are calculated based on the
undiluted share count as of 12/31/2016, (ii) include the dilutive
impact of the $351 million Exchangeable Notes issued in connection
with the F1 acquisition and (iii) exclude the approximately 19
million LMCK shares held in Treasury and not outstanding as of the
closing of the F1 acquisition. Percentages do not sum to 100 due to
rounding.
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