NEW YORK (AP) — Sirius XM jumped 7 percent in the first day of trading after Liberty Media said it wanted to acquire the entire company in a deal that values it at nearly $23 billion.
The complex proposal announced Friday after markets closed would enable Liberty Media Corp. to take ownership of the satellite radio company after it acquired a controlling interest last year.
Liberty Media, an Englewood, Colo., company controlled by billionaire John Malone, owns about 53 percent of Sirius XM's stock, according to a letter filed Friday with the Securities and Exchange Commission.
Under the proposal, each Sirius share would be exchanged for 0.076 shares of Liberty Media's Series C Common stock if the bid is accepted.
Sirius XM stockholders would end up with a 39 percent stake in Liberty Media. The stock swap translates into $3.68 for each Sirius XM share, based on Friday's closing price of Liberty Media's stock. That was just 3 percent above Sirius XM's Friday closing stock price.
Sirius XM Holdings Inc., based in New York, has built the world's largest pay-radio service with 25.6 million subscribers. Despite its popularity, Sirius XM has faced numerous challenges through the years, including stiffer competition from digital radio alternatives offered by Pandora Media Inc. and Apple Inc.
Liberty Media's portfolio includes ownership of the Atlanta Braves baseball team, and stakes in cable TV and Internet service provider Charter Communications Inc., concert promoter Live Nation Entertainment Inc. and book retailer Barnes & Noble Inc.
It saved Sirius XM from near bankruptcy in 2009 with a $530 million loan.
In early trading, Sirius XM shares rose 24 cents to $3.81.