Randy J.
02-19-2007, 01:44 PM
aper: XM and Sirius to disclose merger
Deal between two satellite radio providers would be ‘merger of equals’
NEW YORK - The two main satellite radio providers, XM Satellite Radio and Sirius are expected to announce a long-awaited merger on Monday, according to the New York Post.
The newspaper said the two companies were negotiating over the weekend to merge, a deal expected to be structured as a "merger of equals."
Representatives of the two companies could not immediately be reached for comment.
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After months of speculation, chatter has escalated about a possible deal. Sirius and XM are adding subscribers rapidly to their pay-radio services, but losing money as they try to improve technology and sign top entertainment ranging from the largest U.S. sports leagues to media celebrities such as Howard Stern, Oprah Winfrey and Martha Stewart.
A deal would face tough scrutiny from U.S. regulators. It probably would face stiff opposition from the National Association of Broadcasters, which represents local radio stations and is one of the most powerful lobbying groups in Washington.
Federal licenses for the satellite services prohibit one entity from owning them. However, Federal Communications Commission Chairman Kevin Martin has said the licenses could be altered, if requested.
A merger also would require approval from U.S. antitrust authorities.
A tie-up could save the combined companies $7 billion and end their fierce battle for dominance, Stifel Nicolaus analysts said in a client note in January.
But other observers say a deal may not be smart, since the companies have incompatible radio hardware, and each is locked into expensive, long-term content deals. Even more, a merger may confuse consumers, who already have many other leisure options, such as iPods, video games and Internet media.
The newspaper on Monday said Sirius, due to its higher enterprise value, would end up with a bigger piece of the combined company, with chief executive Mel Karmazin taking the CEO role.
But Bear Sterns analyst Robert Peck, who suggested on Friday that investors push the two companies to combine, said XM would own about 55 percent of the new company.
New York-based Sirius, satellite radio home to Howard Stern and the National Football League, ended 2006 with more than 6 million subscribers. Washington-based XM, which carries Major League Baseball games and shows produced by Oprah Winfrey, said it ended 2006 with more than 7.6 million subscribers.
Shares of XM closed on Friday at $13.98 on the New York Stock Exchange, while Sirius shares closed at $3.70 on Nasdaq.
Deal between two satellite radio providers would be ‘merger of equals’
NEW YORK - The two main satellite radio providers, XM Satellite Radio and Sirius are expected to announce a long-awaited merger on Monday, according to the New York Post.
The newspaper said the two companies were negotiating over the weekend to merge, a deal expected to be structured as a "merger of equals."
Representatives of the two companies could not immediately be reached for comment.
Story continues below ↓ advertisement
After months of speculation, chatter has escalated about a possible deal. Sirius and XM are adding subscribers rapidly to their pay-radio services, but losing money as they try to improve technology and sign top entertainment ranging from the largest U.S. sports leagues to media celebrities such as Howard Stern, Oprah Winfrey and Martha Stewart.
A deal would face tough scrutiny from U.S. regulators. It probably would face stiff opposition from the National Association of Broadcasters, which represents local radio stations and is one of the most powerful lobbying groups in Washington.
Federal licenses for the satellite services prohibit one entity from owning them. However, Federal Communications Commission Chairman Kevin Martin has said the licenses could be altered, if requested.
A merger also would require approval from U.S. antitrust authorities.
A tie-up could save the combined companies $7 billion and end their fierce battle for dominance, Stifel Nicolaus analysts said in a client note in January.
But other observers say a deal may not be smart, since the companies have incompatible radio hardware, and each is locked into expensive, long-term content deals. Even more, a merger may confuse consumers, who already have many other leisure options, such as iPods, video games and Internet media.
The newspaper on Monday said Sirius, due to its higher enterprise value, would end up with a bigger piece of the combined company, with chief executive Mel Karmazin taking the CEO role.
But Bear Sterns analyst Robert Peck, who suggested on Friday that investors push the two companies to combine, said XM would own about 55 percent of the new company.
New York-based Sirius, satellite radio home to Howard Stern and the National Football League, ended 2006 with more than 6 million subscribers. Washington-based XM, which carries Major League Baseball games and shows produced by Oprah Winfrey, said it ended 2006 with more than 7.6 million subscribers.
Shares of XM closed on Friday at $13.98 on the New York Stock Exchange, while Sirius shares closed at $3.70 on Nasdaq.