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  • XM, Sirius satellite radio announce merger

    By Kara Rowland
    THE WASHINGTON TIMES
    February 19, 2007


    4:27 p.m.
    The D.C. company XM Satellite Radio and Sirius Satellite Radio have agreed to combine in a $13 billion stock transaction, the companies announced today.
    Under the deal, which the companies call a "merger of equals," Sirius Chief Executive Officer Mel Karmazin and XM Chairman Gary Parsons will keep their respective positions in the combined company. XM CEO Hugh Panero will stay on until the deal closes -- anticipated to happen by the end of the year.
    Shareholders of XM and Sirius, which is based in New York, each will own "approximately 50 percent" of the new company, whose name and headquarters have not been determined.
    Together, the companies have 14 million subscribers and had 2006 revenues of $1.5 billion.
    "We are excited for the many opportunities that an XM and Sirius combination will provide consumers," Mr. Parsons and Mr. Panero said in a joint statement.
    To proceed, the merger must be approved by the Federal Communications Commission and Department of Justice. Despite the companies? apparent optimism, many are questioning whether the deal can clear antitrust hurdles.
    The FCC?s rules on satellite radio licenses appear to bar such a deal because, as Chairman Kevin J. Martin said at a press conference last month: "There?s a prohibition on one entity owning both of those licenses."
    Still, Mr. Martin said the body would consider any proposed transaction.
    In apparent anticipation of regulatory concerns, Sirius and XM alluded to changed market conditions, citing the "continually expanding array of entertainment alternatives that consumers have embraced since the Federal Communications Commission first granted our satellite radio licenses a decade ago."
    Rumors of a merger between Sirius and XM have been brewing for some time, fueled by analysts? speculation and comments by the companies? executives. Last month, at the Consumer Electronics Show in Las Vegas, both Mr. Parsons and Mr. Karmazin appeared open to the idea, with Mr. Karmazin noting that "consolidation creates value."
    The companies will hold a conference call tomorrow morning to discuss the deal.

  • #2
    UPDATE 2-Sirius to buy XM in $4.6 bln stock deal

    NEW YORK, Feb 19 (Reuters) - Sirius Satellite Radio (SIRI.O: Quote, Profile , Research) agreed to buy larger U.S. rival XM Satellite Radio (XMSR.O: Quote, Profile , Research) for $4.6 billion in stock on Monday in a deal that gives all subscribers access to entertainers such as Oprah Winfrey and shock-jock Howard Stern.

    The transaction, which faces regulatory scrutiny and objections from terrestrial radio companies, gives XM shareholders 4.6 Sirius shares for each XM share held.

    The deal has Sirius paying about $4.6 billion in stock for XM, or a 21.7 percent premium to XM's closing share price of $13.98 on Friday, based on shares outstanding in the latest regulatory filings.

    Veteran media executive Mel Karmazin, currently Sirius CEO, will lead the new company as CEO, while Gary Parsons, now chairman of XM, will hold the same position in the new company. It said Hugh Panero, XM CEO, will continue in his current role until the merger closes.

    The merger would create a company with about $1.5 billion in 2006 revenue and an enterprise value of $13 billion, including $1.6 billion in net debt.

    "This combination is the next logical step in the evolution of audio entertainment," said Karmazin in a statement. He said it will create "unprecedented choice for consumers."

    The deal will face tough regulatory scrutiny. The satellite radio licenses prevent one entity from owning them, however Federal Communications Commission Chairman Kevin Martin said last month that its rules are open to change

    "I think it's a close call, but more likely than not I think the Justice Department and the FCC approve it," said Blair Levin, an analyst at Stifel Nicolaus & Co. and a former FCC chief of staff during the Clinton administration.

    The National Association of Broadcasters, which represents local broadcast radio stations, immediately criticized the tie-up because it would concentrate the licenses into one company and accused them of seeking a government bailout.

    "When the FCC authorized satellite radio, it specifically found that the public would be served best by two competitive nationwide systems," said NAB spokesman Dennis Wharton.

    "Now, with their stock prices at rock bottom and their business model in disarray because of profligate spending practices, they seek a government bailout to avoid competing in the marketplace," he said. (additional reporting by Jeremy Pelofsky)

    Comment


    • #3
      WOW ... This is HUGE!!!!!!

      Does that mean i get every channel from both on my Sirius???

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      • #4
        I hope!
        Am I the longest tenured BC member?

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        • #5
          Me Too!!!

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          • #6
            Sorry Wayne, I read that they are two different system..I am sure they will offer some type of trade in or rebate to get the "new device" that will get all the programing.

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            • #7
              MLB package will be sweet now on serius!!!

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              • #8
                Shit, fuck, damn ....

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                • #9
                  wayne..what happened??

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                  • #10
                    Originally posted by The Lovedoc
                    wayne..what happened??
                    He just realized im AHEAD of him in neckcar survivor.

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                    • #11
                      Originally posted by longnex
                      He just realized im AHEAD of him in neckcar survivor.

                      I have 0 points and i'm ahead of some people too... LOL

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                      • #12
                        Stern on both that rocks..............
                        Here We Go Steelers....Here We Go!!!!

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                        • #13
                          Originally posted by The Lovedoc
                          wayne..what happened??
                          Post 6 brought my response in post 8

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                          • #14
                            Originally posted by wayne1218
                            Post 6 brought my response in post 8


                            Who cares buddy... Atleast we will have MLB in the future!!!! whooohooooooo

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                            • #15
                              I need a new one anyway!!!!!

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