Liberty Media has acquired all shares of super voting Series B common stock held by founder John Malone in exchange for low and no-vote shares. The swap came after Malone received a number of unsolicited offers from third parties for his stake, the company said, at which point “Dr. Malone and Liberty Media began discussing a transaction in which Liberty Media would instead acquire such shares.”
The move knocks the financier’s voting power in Liberty down from 48% to 3%, and no holder of Liberty Media common stock now holds more than 9% of voting power. Malone, who founded the company in 1999, will step down as chairman emeritus but remain a senior advisor. Liberty’s investments have shifted over the years with Formula 1 and Moto GP its main assets currently.
The deal better aligns “John’s voting power with his economic ownership of Liberty Media while avoiding the potential transfer of a significant voting position in Liberty Media to a third party in a transaction in which other Liberty Media shareholders would not participate,” said Chase Carey, chair of a Special Committee Liberty convened to explore the transaction.
Liberty CEO Derek Chang declined to give any details around the offers when asked on a call with analysts after the company’s quarterly earnings.
“I continue to have great confidence in Liberty Media’s management team and fully support them and Liberty Media’s strategy,” said Malone in a statement. “The Transaction allows me to increase my economic ownership of Liberty Media while distributing voting power more broadly among Liberty Media’s other shareholders.”
Board chair Robert Bennett said it simplifies Liberty’s capital structure “and will give us flexibility as we enter our next chapter … We look forward to continuing to benefit from John’s counsel for years to come.”
In specifically laying out the transaction benefits, Liberty said it will “reduce the ability of the Malone Holders or successors thereof to exercise significant influence over matters submitted to Liberty Media’s shareholders for a vote … and eliminate the risk that the Malone Holders’ significant voting power could be transferred to a third party in a transaction in which other Liberty Media shareholders do not participate; and potentially broaden the institutional investor base in Liberty Media’s shares.”
For good measure, Liberty also authorized a rights plan through November of 2027 to “promote stability” after the transaction. The move makes it harder for any person or group to acquire a significant voting position or obtain control in the company without board involvement.
