Sirius set to buy out XM Satellite Radio
By Tim Somers on Feb 20, 2007 in General
Sirius Satellite Radio approved a buy out worth $4.6 billion in stock of their bigger U.S. competitor XM Satellite Radio. This deal will give all subscribers admittance to some of the most popular Satellite Radio shows like Oprah Winfrey and Howard Stern.
XM Satellite Radio shareholders will obtain 4.6 Sirius Satellite Radio shares for each XM share they hold. Sirius will pay roughly $4.6 billion in stock for XM Satellite Radio, or a 21.7 percent premium to XM’s stock price at closing on Friday of $13.98.
The merger between Sirius Satellite Radio and XM Satellite make Sirius a $1.5 billion company with an enterprise value of $13 billion, including $1.6 billion in net debt.
This merger will surely face scrutiny since the satellite radio licenses put a stop to one unit from owning them. But based on a statement made by Kevin Martin (The Chairman of the FCC) the Federal Communications Commission rules are open to change.
Even the National Association of Broadcasters, representing local broadcast radio stations, instantaneously frowned on the merger stating that combining the Sirius Satellite Radio licenses with the XM Satellite Radio licenses was not allowed.
Tim Somers
MusicHoncho.com your source for Satellite Radio
