Tuesday, November 28, 2006

SeekingAlpha: Softer Sales Means SIRI/XMSR Merger More Likely

Satellite Radio Sales Suffering: More Fuel for the Sirius-XMSR Merger Fire?
Posted on Nov 28th, 2006 with stocks: SIRI, XMSR www.seekingalpha.com

Ant & Sons submits: In a Smart Money article set to be released in the magazine's December 1 issue, author Dyan Machan sheds some light on the possibility of Sirius Satellite Radio Inc. (SIRI) merging with satellite radio competitor XM Satellite Radio Holdings Inc. (XMSR). According to Machan's interview with Sirius CEO Mel Karmazin, Karmazin says that he would be interested in merging Sirius with XM Satellite Radio. He elaborates by telling Machan that "mergers often lead to creating shareholder value" and that he has "always been open to that."
Analysts have also given the merger rumors much more credibility in recent weeks. Stifel Nicolaus Analyst Kit Spring said that there is "significant upside potential... if Sirius makes a merger bid for XM Satellite, a scenario which we see as increasingly likely." What is most striking is that Karmazin originally predicted that a merger would face tremendous regulatory issues. Back in June, Karmazin said during an analyst conference call that he would like to buy competitor XM Satellite. He specifically told those in attendance that "we'd love to buy them. Price would matter, so that would be an issue ... (and) there would definitely be the regulatory issue." However, he now believes that regulators would not pose a problem. So is this a hint that Karmazin is in the midst of convincing XM with a merger proposal that would dominate the satellite radio industry?...read more: here

11/28/2006 12:28:00 PM

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