Sirius and XM Satellite may merge
01/18/07 U.S. Federal Communications Commission Chairman Kevin Martin said on Wednesday licenses held by XM Satellite Radio Holdings Inc. and Sirius Satellite Radio Inc. prevent them from combining, but one industry expert said the licenses could be modified. "There's a prohibition on one entity owning both of those licenses," Martin told reporters during a news conference after an agency meeting. But he also said the FCC would examine any transaction submitted to it.
01/13/07 We are bumping this rumor up to 'strong' today. Shares of satellite radio operators XM Satellite Radio Holdings Inc. and Sirius Satellite Radio Inc. rose Friday, on speculation that the companies might merge or combine in another way. Shares of XM Satellite added 74 cents, or 4.5 percent, to $17.12 in afternoon trading on the Nasdaq. The stock has traded between $9.63 and $29.57 in the past 52 weeks. Sirius Satellite shares added 18 cents, or 4.6 percent, to $4.08 on the Nasdaq, where it has traded between $3.50 and $6.51 in the past 52 weeks.
"We believe a 50/50 enterprise value split or perhaps a slight premium to XM shareholders may be warranted in a merger scenario," Stifel Nicolaus analyst Kit Spring said in a Thursday client note, keeping a "Buy" rating on XM shares. Businessweek.com
11/29/06 An attempt to merge Sirius Satellite Radio Inc. and XM Satellite Radio Holdings Inc., the two largest pay-radio providers, is likely to occur within the next 18 months, Denver-based analyst Kit Spring of Stifel Nicolaus & Co. said.
A combination would create $650 million in annual savings, Spring said in a report published Nov. 27. He put the chances of a bid by one side or the other at 75 percent.
XM and Sirius have spent billions of dollars on competition with each other, signing up celebrities such as Howard Stern, Martha Stewart, Bob Dylan and Oprah Winfrey. Their share prices have each declined by more than one-third this year, partly because of investor concerns over marketing and programming costs.
"A successful merger could create $7 billion of shareholder value," Spring wrote. He has a "buy" rating on both stocks. More at Bloomberg