Saturday, February 24, 2007

Merger Talk: Barrons Comments

Single Satellite Would Lift Investors
Barrons, Feb 26

WALL STREET REACTED CAUTIOUSLY to the merger agreement last week between Sirius Satellite Radio and XM Satellite Radio, amid concerns about antitrust approval and fears that the deal amounts to a sign of weakness by the two money-losing rivals, whose shares trade for less than half their 2004 peaks.

Sirius stock rose just 4 cents, to 3.74, while XM gained $1.12, to 15.10. The larger gain in XM shares reflected Sirius' offer to pay a premium for a deal, which has been championed by Sirius CEO Mel Karmazin from almost the moment he arrived at the company back in 2004.
The market skepticism could provide a buying opportunity, because both Sirius and XM are apt to rally if federal regulators okay the deal. XM probably has more upside because it trades at a nearly $2-a-share discount to the current value of the Sirius offer of 4.6 shares of its stock for each XM share...read more: here