XM + Sirius Merging
- Thread starter mzkhadir
- Start date
hmm
I dont' have either service so this would be cool as i would no longer have to figure out which one i wanted to go with. For those with it already though it could suck
I dont' have either service so this would be cool as i would no longer have to figure out which one i wanted to go with. For those with it already though it could suck
- Oct 28, 1999
- 62,484
- 8,345
- 126
More speculation....
Wedding Bells for XM and Sirius?
6:20p ET January 10, 2007 (S&P)
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. (Citigroup has gotten compensation for investment banking services for XM in recent months, among other things, but Furukawa certifies that the views she expresses in her research are her personal opinion. Nor is her compensation related to her view.)
The analyst said that XM believes that if the Justice Dept. were considering the threat of competitive disruptions related to a possible merger, it would take a broad view of the competitive landscape -- including traditional radio, iPods and MP3 players, HD radio and Internet radio, XM believes. FCC approval remains a large unknown, Furukawa said.
She also thinks that the two companies would have to reconcile many matters. For example, XM would likely demand a "substantial" premium if it were to be acquired by Sirius. Also, the two companies have different ways of dividing up line items on their financials. But they could also do a large amount of cost cutting by joining in areas like programming, marketing and satellite business, Furukawa said.
She maintained a buy rating on the stock, noting that ongoing speculation about a merger is likely to limit the downside to its price. Also citing other factors such as XM's valuation and improved risk, Furukawa raised her price target on the stock to $21 from $16 per share.
But one other analyst is taking a less bullish tack. S&P equity analyst Tuna Amobi, in a Jan. 10 research note, said that "[d]espite potential strong synergies, we do not think ... that the potential combination of satellite radio rivals would pass regulatory muster." Amobi sees any takeover premium as "unwarranted."
The analyst is also skeptical that XM's push into the automotive market "could help offset further fundamental contractions in [the] retail channel." He kept his sell opinion on XM. (Standard&Poor's, like BusinessWeek.com. is a unit of The McGraw-Hill Cos.)
Sirius gained 7.3% to $3.98 on the Nasdaq on Jan. 10, while XM's stock price surged 10.1% to close at $16.65 on the Nasdaq. XM stock has plunged from its 52 week high of $30.46 per share on Jan. 11, 2006, following the company's struggles with challenges such as a probe into its marketing activity, accusations that it misled investors, and criticism of its spending.
Wedding Bells for XM and Sirius?
6:20p ET January 10, 2007 (S&P)
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. (Citigroup has gotten compensation for investment banking services for XM in recent months, among other things, but Furukawa certifies that the views she expresses in her research are her personal opinion. Nor is her compensation related to her view.)
The analyst said that XM believes that if the Justice Dept. were considering the threat of competitive disruptions related to a possible merger, it would take a broad view of the competitive landscape -- including traditional radio, iPods and MP3 players, HD radio and Internet radio, XM believes. FCC approval remains a large unknown, Furukawa said.
She also thinks that the two companies would have to reconcile many matters. For example, XM would likely demand a "substantial" premium if it were to be acquired by Sirius. Also, the two companies have different ways of dividing up line items on their financials. But they could also do a large amount of cost cutting by joining in areas like programming, marketing and satellite business, Furukawa said.
She maintained a buy rating on the stock, noting that ongoing speculation about a merger is likely to limit the downside to its price. Also citing other factors such as XM's valuation and improved risk, Furukawa raised her price target on the stock to $21 from $16 per share.
But one other analyst is taking a less bullish tack. S&P equity analyst Tuna Amobi, in a Jan. 10 research note, said that "[d]espite potential strong synergies, we do not think ... that the potential combination of satellite radio rivals would pass regulatory muster." Amobi sees any takeover premium as "unwarranted."
The analyst is also skeptical that XM's push into the automotive market "could help offset further fundamental contractions in [the] retail channel." He kept his sell opinion on XM. (Standard&Poor's, like BusinessWeek.com. is a unit of The McGraw-Hill Cos.)
Sirius gained 7.3% to $3.98 on the Nasdaq on Jan. 10, while XM's stock price surged 10.1% to close at $16.65 on the Nasdaq. XM stock has plunged from its 52 week high of $30.46 per share on Jan. 11, 2006, following the company's struggles with challenges such as a probe into its marketing activity, accusations that it misled investors, and criticism of its spending.
JohnAn2112
Diamond Member
- May 8, 2003
- 4,895
- 1
- 81
Yeah, that'll suck since it sounds like a new tuner will be required since the hardware for XM vs Sirius is different. My Sirius sub goes until Feb of 08 and if they say I need a new tuner for the merge, I won't renew.
Lord I hope Sirius buys XM. I know Sirius has more cash on hand than XM.
I do NOT want the clear channel music stations with commercials.
I hope they get rid of all XM stations. XM BLOWS. My sister has it, and I have yet to find one decent station. I was once driving in her car and 3 channels in a row had the exact same song on...
Stern addressed this as PURE speculation. Seems like it would be a while before this actually happened.
Gunslinger08
Lifer
- Nov 18, 2001
- 13,234
- 2
- 81
I really hope this isn't true. Sirius is much better than XM and I enjoy my stations the way they are now. About the only thing I'd like from XM is baseball.
I hope they do merge, makes it easier for me to decide which to get, and I have a better chance of finding what I want.
Mermaidman
Diamond Member
- Sep 4, 2003
- 7,987
- 93
- 91
If the merger ever happens, I'm sure it'll take a while to 'combine' the technology. By the time it's done, you'd want a new tuner anyway. As for new customers who might be put off by soon-to-be obsolescent hardware, I'm sure a smart company would offer credit for future hardware exchange.
Remember when Sprint and Nextel merged?
edit: And yes, I would like a merger to get the best of both companies. or maybe the worst
.
MichaelD
Lifer
- Jan 16, 2001
- 31,528
- 3
- 76
Roger that! :roll: The whole point of satellite radio is no commercials!! I just renewed my Sirius subscription (like two days ago!) and would totally schit myself if suddenly I "had XM." I've heard it and it totally blows.
/not in the truck ATM, but streaming Alt Nation right now!
QFT. The only good channel I've found is Flight 26, but I still go for my MP3 player over XM right now...plus Sirius has cooler tuners!
jdoggg12
Platinum Member
- Aug 20, 2005
- 2,685
- 11
- 81
This is pretty lame... if they merge, they become a monopoly and there's no competition to provide incentive to remain commercial free. So in all likelihood, most channels will pick up commercials. Pay cable was initially touted as being commercial free, hence why you were paying for it... see where thats gone?
- Oct 28, 1999
- 62,484
- 8,345
- 126
It's not a monoply because you still have terrestrial/local radio stations you can pick up for free.
Also, if they go too heavy on the commercials people will simply dump it for free local stations.
FWIW, I'm a Sirius subcriber and I hold a number of SIRI stock shares.
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