Sirius and XM to merge
#1
Sirius and XM to merge
February 19, 2007 -- Satellite radio operators Sirius and XM are expected to announce their long-awaited merger today, according to a source familiar with the deal.
The two sides were locked in negotiations over the weekend trying to hammer out a final agreement with an eye toward going public with the merger today in Washington, D.C., where XM is based, this source said.
Talks were still going on at press time and the deal could fall apart at any time. With antitrust issues of paramount importance, this source said lawyers for both companies were working overtime to fine-tune the language of the agreement and frame the discussion around the deal itself and not regulatory concerns.
The transaction is expected to be structured as a merger of equals, but given Sirius' higher enterprise value, shareholders in the Mel Karmazin-led firm will likely come away with a larger percentage of a combined company.
According to the source, XM Chairman Gary Parsons will retain that title in the combined entity, with Karmazin likely taking the CEO role. It is unclear what role, if any, XM CEO Hugh Panero will play.
Combining Sirius and XM would result in a single satellite radio operator with more than 12 million total subscribers. A deal would also marry Sirius content, such as Howard Stern, Frank Sinatra and Nascar with XM's Oprah Winfrey, Bob Dylan and Major League Baseball.
More important, analysts widely predict that a deal would also save the two companies nearly $7 billion annually.
Karmazin and Parsons have been dropping hints since last summer about a possible tie-up, believing that competition from terrestrial radio, online radio and mobile music devices such as iPods have not only expanded the marketplace but also lowered the regulatory hurdles to a deal.
In a note on Friday, Bear Stearns analyst Robert Peck speculated that Sirius and XM needed to move quickly before their window of opportunity closed.
Gaining regulatory approval "could take up to 15 months; hence, we think any proposed deal needs to be announced by the end of March to close by mid-2008," Peck wrote.
On Friday, XM shares hit their lowest point since early November while Sirius shares were approaching 52-week lows. Shares in both companies did trade on heavy volume and ended the session higher, with Sirius gaining 10 cents to close at $3.70 and XM jumping a dollar to $13.98.
The two sides were locked in negotiations over the weekend trying to hammer out a final agreement with an eye toward going public with the merger today in Washington, D.C., where XM is based, this source said.
Talks were still going on at press time and the deal could fall apart at any time. With antitrust issues of paramount importance, this source said lawyers for both companies were working overtime to fine-tune the language of the agreement and frame the discussion around the deal itself and not regulatory concerns.
The transaction is expected to be structured as a merger of equals, but given Sirius' higher enterprise value, shareholders in the Mel Karmazin-led firm will likely come away with a larger percentage of a combined company.
According to the source, XM Chairman Gary Parsons will retain that title in the combined entity, with Karmazin likely taking the CEO role. It is unclear what role, if any, XM CEO Hugh Panero will play.
Combining Sirius and XM would result in a single satellite radio operator with more than 12 million total subscribers. A deal would also marry Sirius content, such as Howard Stern, Frank Sinatra and Nascar with XM's Oprah Winfrey, Bob Dylan and Major League Baseball.
More important, analysts widely predict that a deal would also save the two companies nearly $7 billion annually.
Karmazin and Parsons have been dropping hints since last summer about a possible tie-up, believing that competition from terrestrial radio, online radio and mobile music devices such as iPods have not only expanded the marketplace but also lowered the regulatory hurdles to a deal.
In a note on Friday, Bear Stearns analyst Robert Peck speculated that Sirius and XM needed to move quickly before their window of opportunity closed.
Gaining regulatory approval "could take up to 15 months; hence, we think any proposed deal needs to be announced by the end of March to close by mid-2008," Peck wrote.
On Friday, XM shares hit their lowest point since early November while Sirius shares were approaching 52-week lows. Shares in both companies did trade on heavy volume and ended the session higher, with Sirius gaining 10 cents to close at $3.70 and XM jumping a dollar to $13.98.
#7
Originally Posted by Buzz
now that there will be no satellite radio competition, watch the price go up.
#8
Im interested to see how 2 companies that went out of their way to ensure that their softwear, dish signals and equipment would not work together to make sure you have to pick one or the other, are now going to possibly make everything work together under one company.....
As long as I still get Opie and Anthony on XM 202 Im happy.....
As long as I still get Opie and Anthony on XM 202 Im happy.....
#9
i got this email so it wont effect Canada for a while anyways
Dear/ Bonjour Aaron
XM Satellite Radio Inc. and Sirius Satellite Radio in the United
States have announced their intention to merge subject to U.S.
shareholder and government approval. Many of you have asked us, "What
does this mean for subscribers to XM Radio in Canada?"
There will be no change in the service we deliver to our Canadian
Subscribers.
This U.S. development has no immediate implications for Canadian
subscribers. XM Canada is an independent Canadian owned company that
holds the exclusive license to provide XM satellite radio services in
Canada. We remain committed to providing you with the finest digital
audio entertainment and information services in the country.
The stated intent of our XM U.S. partner and Sirius is to maintain two
separate satellite delivery systems which will ensure that your XM
radio will continue to operate as it does today for the foreseeable
future. There will be no disruption or change to the availability of
your XM service as we continue to deliver the best in commercial free
music, comedy, talk, news, and sport - including coverage of the NHL,
and exclusive coverage of MLB (Major League Baseball) and the PGA
(Professional Golf Association).
Future Communications
We will continue to provide you with full information about XM Canada
through our existing communication channels including our monthly
e-mail newsletter, XM Signal, and our website www.xmradio.ca .
Thank you for choosing XM Canada.
Sincerely,
Stephen Tapp
President and COO
XM Canada
Dear/ Bonjour Aaron
XM Satellite Radio Inc. and Sirius Satellite Radio in the United
States have announced their intention to merge subject to U.S.
shareholder and government approval. Many of you have asked us, "What
does this mean for subscribers to XM Radio in Canada?"
There will be no change in the service we deliver to our Canadian
Subscribers.
This U.S. development has no immediate implications for Canadian
subscribers. XM Canada is an independent Canadian owned company that
holds the exclusive license to provide XM satellite radio services in
Canada. We remain committed to providing you with the finest digital
audio entertainment and information services in the country.
The stated intent of our XM U.S. partner and Sirius is to maintain two
separate satellite delivery systems which will ensure that your XM
radio will continue to operate as it does today for the foreseeable
future. There will be no disruption or change to the availability of
your XM service as we continue to deliver the best in commercial free
music, comedy, talk, news, and sport - including coverage of the NHL,
and exclusive coverage of MLB (Major League Baseball) and the PGA
(Professional Golf Association).
Future Communications
We will continue to provide you with full information about XM Canada
through our existing communication channels including our monthly
e-mail newsletter, XM Signal, and our website www.xmradio.ca .
Thank you for choosing XM Canada.
Sincerely,
Stephen Tapp
President and COO
XM Canada
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