Thursday, January 11, 2007

Citigroup: Sirius-XM Merger Does Make Sense

Wedding Bells for XM and Sirius?
www.businessweek.com, Jan 10

Shares of both outfits climbed Wednesday as a Citigroup report appeared to fuel merger speculation
Could XM Satellite Radio (XMSR) and Sirius Satellite Radio (SIRI) actually move into the same orbit? A Citigroup analyst says odds are more likely now that a merger between the two companies could happen.
Of course, the combination of the two players in what is basically a duopoly would face some hurdles. They'd need okays from the Department of Justice and the Federal Communications Commission, for example. The two rivals would have to resolve differences on key things like how they count their subscribers. And then there are other matters like pricing concerns.
But Citigroup analyst Eileen Furukawa sees some possibilities. After an investor dinner with XM Chairman Gary Parsons and CFO Joe Euteneuer, Furukawa "sensed an increased openness from XM re: the possibility of merger with Sirius," she said in a research note Jan. 10. If such a deal did happen, she thinks it would take place before the Fall. (...read more: here