Merger Talks Heat Up
June 28, 2006
The topic of a megrer between Sirius Satellite Radio and XM Satellite Radio seem to be all the rage these days, but this article is not about the satellite radio rivals. It is about two of the companies that supply music to Sirius and XM.
EMI and Warner Music have each made takeover bids for the other company, and both companies have rejected each others offer.
Excerpts From Associated Press:
Warner Music made a cash offer for EMI on Tuesday of 320 pence ($5.84) per share, valuing the company at 2.5 billion pounds ($4.6 billion), EMI said. It rejected the bid, calling it "wholly unacceptable" considering the potential synergies of a combination and the range of options EMI has.
That offer came four days after EMI bid $31 per share to acquire Warner Music, valuing the company at $4.2 billion, EMI said. Warner rejected that offer.
EMI said it also rejected Warner's bid of 315 pence per share made June 14.
New York-based Warner Music did not immediately return a call seeking comment.
A combination of EMI and Warner Music would control about 25 percent of the recorded music market, surpassing BMG in the rankings and moving into second place behind Universal, according to the International Federation of the Phonographic Industry......
As many satellite radio investors are aware, the music companies are at the center of the new devices that Sirius and XM have on the market. Sirius has come to terms with the group on their S50 unit, while the RIAA is in litigation with XM over the INNO, Helix, and Nexus devices.Just how such a merger/takeover in the music industry would effect satellite radio is unknown, but investors should keep their eyes on this issue.
Interested SSG readers can read more
HERE via Yahoo and the AP
6/28/2006 03:03:00 PM
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