Liberty Media, the conglomerate that already controls SiriusXM and Pandora, is creating a special purpose investment subsidiary that it says will look for targets in the media, digital media, music, entertainment, communications, telecommunications and technology industries. Its filing with the Securities and Exchange Commission does not reveal whether it has any specific companies or businesses at the top of its list, but Liberty will have plenty of money to spend.
Liberty has created what is known as a SPAC or special purpose acquisition company. What has been named Liberty Media Acquisition Corporation has filed an IPO that Liberty hopes will raise at least $500 million. Liberty said it aims to sell 50 million units at $10 apiece. If there is more interest than it expects, the regulatory filing says the fund could grow to as much as $575 million. Either way, Liberty said it will own 20% of the subsidiary and it expects to commit $250 million to its funding. The new arm is expected to be traded on the Nasdaq under the ticker symbol “LMACU.”
“We see opportunities out there that this SPAC could be a useful tool in our corporate finance arsenal, and where we could put capital to work in ways that are beneficial to us and the shareholders,” said Liberty Media CEO Greg Maffei. In an interview with CNBC, he said some of the companies under their umbrella already have the money they need to grow. But others don’t. “In many of the spaces we don’t have the capital and they don’t necessarily fit with our existing entities and this is another tool that we can use to put smart investments to work,” said Maffei. He said they hope Liberty’s financial and operational experience could help attract some potential targets to be open to their overtures. “The pandemic will linger; this isn’t going to be a switch turned off or on. There are going to be different segments which come out at slower rates and I suspect there will be opportunities where we can assist those companies,” he said.
In addition to SiriusXM and Pandora, Liberty Media said this week that it had raised its stake in iHeartMedia. In a regulatory filing Liberty said it now holds a 9.9% interest in iHeartMedia. That is up from a 4.8% stake it held this summer. As of Nov. 5, Liberty said it owned just under seven million shares of iHeartMedia stock after it traded-in warrants for stock. That move was allowed by an FCC decision this month permitting iHeartMedia to exceed the 25% foreign ownership ceiling. Other investors have done the same, and that has helped to boost iHeartMedia’s share price 14% in the two weeks since the FCC decision.