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Liberty Media prices $400M debt offering

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Liberty Media prices $400M debt offering

Liberty Media Corp. priced and agreed to sell $400 million of 1.0% cash convertible senior notes due 2023 in a private offering to initial purchasers, who will get an option to purchase additional notes of up to $50 million.

The offering is expected to close Jan. 23, subject to the satisfaction of customary closing conditions. The notes, which will mature on Jan. 30, 2023, will be convertible into cash based on the trading prices of the underlying shares of series C Liberty Media common stock. The initial conversion rate for the notes will be 27.1091 shares of Liberty Media per $1,000 principal amount of notes, equivalent to an initial conversion price of about $36.89 per share of Liberty Media. All conversions of notes will be settled in cash.

Liberty expects to use the net proceeds to fund an increase to the cash consideration payable to the selling shareholders of Formula 1 by $400 million instead of the about 19 million shares based on the per share purchase price of $21.26. These Liberty Media shares will be reserved by Liberty for issuance to the F1 teams at a per share purchase price of $21.26.

As a result, while the total number of Liberty Media shares to be issued at the F1 deal closing will not change, the allocation of the 138 million shares will change as follows: about 57 million to the selling shareholders, about 62 million to the third party investors and nearly 19 million into treasury.

Once the transaction is completed, the Liberty Media Group equity will be owned about 33% by the selling shareholders, about 28% by the third-party investors, and about 38% owned by existing Liberty Media Group shareholders. This does not include 19 million LMCK shares to be held in treasury.

Pro forma for this financing and the closing of the F1 acquisition, total debt attributed to the Liberty Media Group will include the proposed $450 million cash convertible senior notes due 2023, $1 billion 1.375% convertible notes due 2023, $445 million Time Warner Inc. exchangeable debentures due 2046, $350 million drawn under a Live Nation margin loan, $36 million of other corporate level debt as of Sept. 30, 2016, and about $4.1 billion of existing F1 debt as of July 31, 2016.