Liberty Media offshoot raises $575m to buy huge company – will it be in music?

Photo Credit: Giorgio Trovato

Liberty Media Acquisition Corporation (LMAC), the newly formed “blank check” acquisition company launched by Liberty Media, raised $575 million in its Initial Public Offering on the Nasdaq Stock Exchange in the US last week.

The company’s 57,500,000 shares started trading at $10 per unit on January 22, under the symbol LMACU.

Citigroup, Morgan Stanley, Credit Suisse and Goldman Sachs & Co. LLC acted as joint book-running managers for the offering.

According to LMAC’s prospectus filed with the SEC, the Liberty Media offshoot was formed in Delaware on November 6, 2020 specifically for the purpose of “effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses”.

A press release issued yesterday (January 26) announcing the closing of the IPO stated that LMAC “intends to search for a target in the media, digital media, music, entertainment, communications, telecommunications and technology industries”.

In response to that statement of intent, two questions on the lips of many in the music business today, are: will LMAC’s target acquisition end up being a music company, and if so, who will it be?

In LMAC’s prospectus and on its new website, the company explains that, “We have not selected any business combination target and we have not, nor has anyone on our behalf, engaged in any substantive discussions, directly or indirectly, with any business combination target”.

The statement adds: “We intend to effectuate our initial business combination using cash from the proceeds of this offering and the sale of the private placement warrants and forward purchase units, our capital stock, debt or a combination of cash, stock and debt.”

LMAC’s management team is led by Greg Maffei and includes other members of Liberty Media Corporation’s current management team, such as Chief Portfolio Officer Courtnee Chun, who serves as Chief Portfolio Officer for Liberty Media Corporation, Qurate Retail. Inc., Liberty TripAdvisor Holdings, Inc. and Liberty Broadband Corporation.

The LMAC team also includes  Senior Vice President, Ben Oren who was appointed Senior Vice President and Treasurer of Liberty Media Corporation, Qurate Retail, Inc., Liberty TripAdvisor Holdings, Inc. and Liberty Broadband Corporation in August last year, having spent two decades prior to that in investment banking.

LMAC’s sponsor is a wholly-owned subsidiary of Liberty Media and holds a 20% interest in LMAC. Liberty’s ownership interest in LMAC is attributed to the Formula One Group tracking stock.

Amongst other holdings, Liberty Media – via its Liberty SiriusXM group – owns a 33% stake in Live Nation Entertainment, and a 5% stake in iHeartMedia.

In addition, it owns a 74% stake in SiriusXM, which in turn fully owns Pandora.

SiriusXM has also owned a minority interest in SoundCloud since February 2020 via a $75 million investment in the streaming audio service.

 Music Business Worldwide