Arbs Bet Liberty Media Will Combine Its Tracker With SiriusXM

Arbitrage traders are looking to profit from Liberty Media Corp.’s plan to spin off its Sirius XM Holdings Inc. tracking shares, but effectively betting the deal will go through is difficult.

Liberty Media proposed taking the roughly 83% of SiriusXM that it owns, and combining it with the publicly traded shares of the broadcasting company. Liberty’s tracking stock, meant to reflect the value of its SiriusXM shares, has typically been trading at around a 35% discount to its net asset value, according to Bloomberg Intelligence’s Geetha Ranganathan. This transaction is designed to unlock the value of the ...