NEW YORK (CelebrityAccess) — Liberty Media Corporation, one of Live Nation’s largest investors, announced that it has reallocated its interests in the concert company along with other assets in its profile.
The reattribution saw $1.5 billion of net asset value shifted from the company’s Formula One Group to its Liberty Sirius Group, including Liberty’s entire stake in Live Nation.
Liberty, which owns 69.6M shares of Live Nation equating to 33% of the company, says the move is intended to create more focused stock tracking groups.
“The new Formula One Group now has a strengthened balance sheet that positions us to support and enhance the Formula 1 business while also being opportunistic during these challenging times. We believe the reattribution is also responsive to the request of many Formula One Group shareholders to create a more focused currency,” says Liberty Media CEO Greg Maffei.
“For Liberty SiriusXM, this combines a complementary set of businesses that are established leaders in the live and audio entertainment space. Both the new Formula One Group and Liberty SiriusXM Group now have currencies with which to complete acquisitions, raise capital and engage in share repurchases, among other things,” Maffei added.
The move led to speculation that Liberty may be preparing to complete its long-rumored acquisition of Live Nation, or a possible merger between SiriusXM and Live Nation.
However, that seems unlikely. As noted by Greg Maffei during a conference call with analysts, the move is intended to realize synergies between Live Nation and SiriusXM that may include streaming Live Nation’s concerts via SiriusXM’s satellite and digital networks such as Pandora.
Benchmark’s Matthew Harrigan pointed out that while both Liberty and SiriusXM have potential synergies, there are enough differences that would make a merger challenging, including SiriusXM’s predictable high margin business model compared against Live Nation’s lower margin cyclical business.
Last month, Liberty bolstered Live Nation amid the COVID-19 fiscal crisis by repaying a margin loan worth $130 million.
“With the payment of $130 million, there are no margin or other price triggers that could require a sale of the underlying stock,” Liberty said in a press release at the time.
At the time of publication, Live Nation was trading down by 3.45% on the day at $38.10.