Liberty Media—owner of the Atlanta Braves, Formula One and Sirius XM Radio—has formed a blank check company to seek a target acquisition in the “media, digital media, music, entertainment, communications, telecommunications and technology industries,” according to the prospectus, filed with the Securities and Exchange Commission this morning. Liberty Media seeks to raise $500 million through the special purpose acquisition company, or SPAC, named Liberty Media Acquisition Corp. In the prospectus, Liberty also said it would commit another $250 million of its own capital as additional financing if the eventual acquisition deal exceeds the $500 million that Liberty Media Acquisition expects to raise in the IPO.
All indications are that Liberty will be seeking a business that will be complementary to its existing portfolio. Speaking on CNBC this morning, Liberty Media CEO Gregory Maffei noted that the capital of the Braves, Formula One and Sirius XM would only be used on acquisitions that logically fit directly with their businesses. “In many other spaces we don’t have the capital and they don’t necessarily fit with our existing entities. This is just another tool, another opportunity to put smart investments to work,” Maffei said. Using a SPAC doesn’t rule out finding businesses that would end up under the umbrella of one of Liberty’s three existing units, however.
The creation of a SPAC by an entity that’s already publicly traded is a new twist on the blank-check approach. Typically, a publicly traded company like Liberty could use its capital on hand or issue new shares to raise funds for acquisitions. Instead, the company will essentially be adding a new partially owned subsidiary through the shares it will have through the SPAC process. The Braves, Formula One and Sirius XM businesses are broken out by Liberty as three tracking stocks.
The executive team of the Liberty Media SPAC will include Maffei as CEO as well as three Liberty Media veterans: Brian Wendling as accounting officer, Albert Rosenthaler as development officer and Renee Wilm as legal officer.