Sept 26 (Reuters) - Billionaire John Malone's Liberty Media is looking to combine the business that contains its stake in SiriusXM with the rest of the radio company, in a deal to create a publicly listed firm controlled by the conglomerate.

The proposal aims to spin off Liberty SiriusXM Group or LSXM, the group through which it owns a 83% stake in SiriusXM, into a new unit that would merge with the radio company.

"SiriusXM minority shareholders will also benefit from enhanced trading dynamics, including increased liquidity and likelihood of future index inclusion," Liberty Media CEO Greg Maffei said.

SiriusXM said it was evaluating the offer.

After the proposed merger, minority investors of SiriusXM would own about 16% of the new company, while Liberty Media would own the rest.

Shares of SiriusXM fell 9% in premarket trading, while LSXM, series A shares of Liberty Media's tracking group for the radio-company's stock, rose about 10.4%.

A tracking stock depends on the financial performance of the segment of the business it "tracks", which refers to SiriusXM here. They trade separately from the parent company's stock.

Liberty Media also has publicly listed tracking groups for its interest in Formula One and event ticketing firm LiveNation.

(Reporting by Chavi Mehta in Bengaluru; Editing by Arun Koyyur)