Sirius and XM any closer to merger?

Tuesday, October 16, 2007

Sirius & XM Any Closer?

CNBC just had some back to back coverage regarding Sirius Satellite Radio and possibly of XM Satellite Radio. We've been closely monitoring this merger and it just seems that at least the chances of a "biast toward approval" have increased at least a bit.

David Faber got to interview Sirius' CEO Mel Karmazin. Karmazin noted to Faber that both Sirius and XM have each sent in 6 million pages of documents to the regulatory agencies and have communicated with the FCC. Karmazin said he thinks the chances should be 100% that the deal closes in his opinion, but he wouldn't give any formal percentage chances that the merger would really pass regulatory scrutiny. The backup plan is sort of a business as usual if the deal does get blocked. The truth is there wasn't really anything new in the interview.

Shortly after the David Faber interview, Jim Cramer came on CNBC (with a slur from root canals) discussing this and said he thinks the companies will get the deal done and that could get it to a $5.00 stock.

We'll know fairly soon if this will occur or not by the end of the year. We have covered this ourselves with recent notes about the chances getting higher that the deal could close. One thing is for sure though: If the DOJ blocks this merger, XM and Sirius are both likely to announce substantially higher monthly prices to remain viable. We recently noted how it sure sounded like the XM group was preparing to operate as its its own entity.

We have reviewed this merger on and off, but have not yet made any formal calls for our Special Situation Investing Newsletter subscribers. It is our opinion that the deal SHOULD be approved based upon other approvals, but ultimately this is at the mercy of too few key people that are deemed as being heavily under the influence of terrestrial radio lobbying to be able to make the "SHOULD" status become a "WILL" status. The government has rubber-stamped just about every single "inside the US merger" and the influence from the radio industry is what has been holding this up; and the DOJ recently requested more data. We have been reviewing Sirius and XM for the subscriber newsletter but have yet to make a determination we'd be willing to sign our name to. An analyst opinion is one thing, and a decision from the government is another.

Shares were up 1% at $3.58 before the call, but Sirius shares are now up 2% at $3.62 on over 33 million shares today after the two segments.

Article Courtesty of Jon C. Ogg
October 15, 2007

This is all good and valuable information, but what it really boils down to is how this merger will effect the consumer market, as well as the thousands of people who have electronics from either Sirius or XM. Will the equipment change? How will issues of compatibility of parts and price be effected?


Post a Comment

<< Home

Get Around GSI

GSI: Blog Home
GSI: Home

Inside SIRIUS Alliance

TSS Radio

Sirius radios, sirius antennas, sirius accessories

SIRIUS Stock Watch

The Coffee Fool

About GSI

We are 100% independent from SIRIUS, unlike other SIRIUS related pages, who have agreements and arrangements with SIRIUS. We do not sell SIRIUS related products and thus we do not worry about any business relationship with SIRIUS. GSI: is a not for profit blog, we do not do this for money like others; with do it out of love for the product. *Some GSI team members are SIRIUS shareholders


07/01/2005 - 08/01/2005 08/01/2005 - 09/01/2005 09/01/2005 - 10/01/2005 10/01/2005 - 11/01/2005 11/01/2005 - 12/01/2005 12/01/2005 - 01/01/2006 01/01/2006 - 02/01/2006 02/01/2006 - 03/01/2006 03/01/2006 - 04/01/2006 04/01/2006 - 05/01/2006 05/01/2006 - 06/01/2006 06/01/2006 - 07/01/2006 07/01/2006 - 08/01/2006 08/01/2006 - 09/01/2006 09/01/2006 - 10/01/2006 10/01/2006 - 11/01/2006 01/01/2007 - 02/01/2007 02/01/2007 - 03/01/2007 10/01/2007 - 11/01/2007

TSS Radio

Sirius radios, sirius antennas, sirius accessories

Powered By