Sirius XM exchangeable share structure uses a Canadian-controlled Canadian purchaser

A Delaware subsidiary (the “Guarantor”) of a Delaware public corporation (Sirius XM Holdings Inc., or “SIRI”) holds approximately a 37% equity interest in TSX-listed Sirius XM Canada Holdings Inc. (the “Company”) (some of it in the form of non-voting shares to address CRTC non-resident control issues) and two Canadian corporations (Slaight and Obelysk), together have approximately a 22.4% equity interest in the Company. It is proposed that the Company shareholders (who also include the CBC, with a 10% equity interest, and the public) will transfer their shares under an OBCA Plan of Arrangement to a new Canadian company (the “Purchaser”). Slaight and Obelysk will together hold 67% of the voting interests and 30% of the equity of the Purchaser at the time of implementing the Plan, with the Guarantor holding the balance of the voting interests and equity. Public shareholders will be offered cash or shares of SIRI for their Company shares, subject to proration based on a maximum share consideration. Shareholders who wish rollover treatment are being offered exchangeable shares of the Purchaser, subject again to potential proration. The Purchaser’s obligations are guaranteed by the Guarantor. Slaight, Oblelysk and the Guarantor will receive only shares of the Purchaser as their sale consideration (much of it in the form of non-voting prefs in the case of the Guarantor.)

Thus, the issuer of the exchangeable shares is not a SIRI subsidiary. Another unusual feature is that the holders of the exchangeable shares will have no right to vote at SIRI (or Purchaser) meetings.

The exchangeable shares are to be redeemed (subject to the usual overriding call right of a “Callco”) on their 5^th anniversary (or sooner, if most of them are exchanged before then.)

Neal Armstrong. Summary of Sirius XM Canada Holdings Inc. Circular under Mergers & Acquisitions – Cross-Border Acquisitions – Inbound – Exchangeable Share Acquisitions.