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Old 01-01-2007, 12:05 AM   #1
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Default Newswire... Merger.

I was just scanning blogs and did a Goog search. Stories were released by the Times ( and others ) that merger talks are underway. I'm not sure if this is the real deal, but considering the release time and date, I have to think this is breaking.

http://www.nytimes.com/2007/01/01/te...rtner=homepage
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Old 01-01-2007, 03:53 PM   #2
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i dont think the article breaks any news--just says a merger might be possible---we have been hearing that all this year
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Old 01-01-2007, 05:24 PM   #3
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This article in the Washington Times says reportedly a merger is being discussed between Sirius and XM.
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Old 01-01-2007, 05:30 PM   #4
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Quote:
Originally Posted by from the article
If the companies merge, they could double their subscription base and reduce programming, the Times said.
Great for the sub numbers, not so great for diversity. It'd be Clear Channel without commercials.
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Old 01-01-2007, 05:31 PM   #5
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Quote:
Originally Posted by SISO
This article in the Washington Times says reportedly a merger is being discussed between Sirius and XM.
Looks to me like it's referring to the NY Times article the OP posted. Sure, the date is different...many news articles are published the evening before the actual date on them.

Still entirely speculation, and not news until it becomes more than speculation, IMNSHO...
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Old 01-01-2007, 06:50 PM   #6
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Quote:
Originally Posted by SISO
This article in the Washington Times says reportedly a merger is being discussed between Sirius and XM.
--

The NYT doesn't generally run a postdated story IMO. On the same token, no source were quoted, or new information added.

It seems to be more than nothing but less than convincing. I'm looking forward to the next two weeks to see if something breaks.

I felt/feel that talks have been ongoing based on statements made by both. E.G. if there is nothing happening Mel wouldn't say " I can't say " while Parsons could say " We're not in talks " when he only offered " no comment " .

One thing for sure, nothing was going to be said by anyone in the prime selling season. It would spook consumers.

_

I spent a few hours running numbers on what Sirius stock may hit with an announced merger.... or what the market would value it at, in better terms.

There are many metrics that can be used at various stages of this business development. I did values up to 2015 based on PE, revenue and market cap.
I can tell you that based on PE, the " new " Sirius could be worth $17.82 per share with 55-60 million subscribers which could happen in 7-8 years.

In very simple terms Sirius is valued now at about 7.5 times sales ( it was 15 times sales ) which is still ludicrous. XMSR is at 4.0 times sales. Taking the best and worst seems to initially make a merged value of Sirius 4.75 to 8.75 per share.

Considering that there would only be one player it MAY ( and probably would ) drive the price greater than the existing 7.5 times sales multiple possibly taking Sirius's price per share into the 9-11 buck range.

In the event of a merger, I'm not going to sell mine below 9.00.

This is truly an example of where the whole is greater than the parts.
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Old 01-01-2007, 09:40 PM   #7
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A merger would be the absolute best case scenario for both Sirius & XM. Lots of technical problems, but it would catapult satellite radio into the mainstream very quickly. I can't think of a better idea than a merger. I hope the two rivals bury the hatchet and work together so it can go smoothly.
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Old 01-01-2007, 10:26 PM   #8
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It should be noted, that this Craig Moffett who works for Sandford C. Bernstein who actually says:

"There is a tendency to view satellite radio as if the glass is half empty, and that it is a failure or disappointment," said Craig Moffett, senior cable analyst for Sanford C. Bernstein.

"In fact, nothing could be further from the truth," he said. "Satellite radio is growing faster than any consumer product except for the iPod."


The parent Company of Sanford C. Bernstein is a company called AllianceBernstein which holds 35.1Million Shares of XM and 16.2 Million Shares of Sirius. Which combined is roughly 500Million dollars invested in both companies. Obviously he would be very bullish on Satellite Radio.

Sources: CNBC
http://www.cnbc.com/id/15837275?q=siri
http://www.cnbc.com/id/15837275?q=xm
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Old 01-02-2007, 11:29 AM   #9
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Default More on Merger Satellite Standard reports....

Another beauty in this is that most don't see Mel working past 2010. To that end, wouldn't it be peachy if he pulled this off, gave the new company some direction, and turned it over to the heir apparent at XM and Senior MGMT. at Sirius. I think Nate would be very good in the upper management of SiXM, and only hope that Panero is in no way involved.

Mel should stay on the BOD after 2010.

Nice guy he is, ( and he is ) he needs to go...doing the right thing for a change as Parsons doesn't have the heart or stomach to dump him.

Please FCC hear our prayers........

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Monday, January 01, 2007
SDARS Merger Chatter
January 1, 2007

The subject of a SDARS merger has again become a main topic of the sector. In a perfect world, the Boards of companies, who have a fiduciary responsibility to shareholders would give anything ample consideration where it appears that shareholders would benefit.

In my opinion, a satellite radio merger has massive potential, particularly if all of the spectrum is allowed to be kept. Certain synergies can not be denied. A merged company would be better able to negotiate content contracts, shelf space at retailers and space in circulars would be cut in half, marketing costs could be reduced dramatically, fees to RIAA and other rights owners would be minimized, OEM contracts could be renegotiated, and the decision for OEM's to install could be streamlined and adoption would be much faster. Costs of overhead could be reduced, and the company could concentrate on delivering the highest quality programming to its subscribers rather than worrying about the direct competition.

Satellite radio is a great concept, but the more these companies beat each other up, the easier it becomes for I-Pods, MP3 players, cell phone carriers, etc. to enter the landscape. A satellite radio merger could produce synergies so profound that the stock price would be forced to react in a very positive manner.

At this point in time, the boards of these companies should not be debating whether or not a merger makes sense…..They should only be debating about how the pie is divided amongst the respective shareholders when they do merge.

The following is commentary from an SSG contributor. Personally, I do not speak for all SSG writers and contributors, and thus you may see varied opinions on this and other subjects. I am for a merger, as is this contributor.

We see some speculating on whether Sirius or XM is the surviving company, and by extension, which set of subscribers have to exchange their receivers for the surviving company’s receiver. The likely answer is neither and both. Assuming a merger and assuming the FCC still permits both licenses to remain intact, its likely that initially, once the merger is approved, unique/exclusive content will be broadcast to both sets of subscribers, along with common programming – both sets of existing subs get all the content (overlay modulation should provide enough bandwidth to accommodate the additional channels on both services).

But as soon as the merger is announced it’s a safe bet that the existing plans to build commercially viable interoperable receivers for both the aftermarket and the OEMs will be quickly implemented. The merged company provides the answer to "who's going to pay for it". With both companies now on 4th and 5th generation chips, the costs should not be significantly different that a single chipset receiver. How much does it cost to put an XM chip in a cell phone? It shouldn’t be any more to put that same chip in a Sirius receiver or vice versa.

The availability of the full bandwidth of both licenses for more unique services opens up tremendous opportunities for additional revenue. For example – what about one set of commercial free music channels (along with other entertainment, sports, etc.) at a subscription price similar to today's, and a separately branded service with 40 or so commercial-based music/other channels at a nominal sub price. It makes putting satellite radio into a car as standard much more attractive to the OEMs. It means that instead of a 50% take rate, or lower as some suggest will happen as more become standard, almost everyone can take advantage of the 2 services – those that like to pay for commercial free will continue to do so. Those that don’t can listen to the commercial-based channels as an attractive alternative to terrestrial. The additional advertising revenue available to the merged company could be significant.

But what happens to the OEM agreements with a merged company? It’s likely they could and would be renegotiated at much more favorably terms. We understand that the major agreements call for a renegotiation with an interoperable receiver, which could bring forward the negotiations from the scheduled expirations.

There are many more opportunities beyond these, including reduced infrastructure costs, overhead, marketing (more focused marketing should also result in more subscribers), reduced content cost (more leverage when renegotiating contracts) and other revenue opportunities. Full implementation will of course take some time, but the wait literally should pay dividends.

Surely people with vision can see that a merger is good for both sets of shareholders. The only issue that the Boards of these companies should be concerning themselves with respect to a merger is how their set of shareholders should share the wealth – and making sure both sets of management teams do everything they can to get approval, rather than resisting and irresponsibly trying to protect their own turf. These companies exist to benefit their shareholders and their customers* – both would benefit with a merger. They do not exist to provide employment to respective sets of managers – let the best of them run the merged company.

*Customers benefit from additional services and a more complete set of services. For those afraid that service quality may deteriorate and/or prices rise to unaffordable levels, remember that satellite radio still has to compete with terrestrial radio, internet radio, MP3/Ipods, etc.
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Old 01-02-2007, 07:41 PM   #10
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It's so funny reading this satellite radio merger speculation. Broadcast industry publications have done several articles on how Democratic control of Congress is going to have a lot of influence on the FCC reducing the concentration of ownership of terrestrial broadcast licenses. Historically Democrats have encourage competition in telcommunications, and the word in the industry is that is about to become the norm once again.

In my opinion, not only do I agree with that, I also see it extending to satellite radio. I don't think the FCC will look positively at an XM/Sirius merger.

Remember, opinions are like belly buttons...everyones got one...
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Old 01-02-2007, 10:11 PM   #11
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Count on it. The FCC is apolitical, and it's that way for a purpose. A Sirius-XM merger is in the interest of MORE competition in the radio industry, not LESS. The idea that Sirius and XM are in competition is ludicrous in todays communications climate.
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Old 01-05-2007, 10:20 AM   #12
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whatever happened to "they will never merge" ? LOL.
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Old 01-05-2007, 07:53 PM   #13
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Quote:
Originally Posted by hazzar
Count on it. The FCC is apolitical, and it's that way for a purpose. A Sirius-XM merger is in the interest of MORE competition in the radio industry, not LESS.
Both ludicrous remarks. FCC apolitical. Nope. Never has been. In fact, it's more political today than ever. And with a merger, how is that in the interest of more competition. Can I have what you're smoking?
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Originally Posted by Andrew-NYC: "...Just make a radio that gets both services, and there will be no need for the merger!"


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Old 01-05-2007, 08:34 PM   #14
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Quote:
Originally Posted by hazzar
A Sirius-XM merger is in the interest of MORE competition in the radio industry, not LESS. The idea that Sirius and XM are in competition is ludicrous in todays communications climate.
That's where you are wrong. There is a major difference between satellite and terrestrial radio. Since Sirius and XM are the only companies that have satellite radio, a merger between the two would be seen as a monopoly of satellite radio unless there is another company or other companies that would have satellite radio. Terrestrial radio has multiple stations in which a merger with a few or many would not be seen as a monopoly since there have been instances of more terrestrial radio stations being set up whether it is in a building or over the computer with some podcasts. Terrestrial has the unfair advantage of more listeners and access without paying a monthly fee.
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Old 01-05-2007, 08:51 PM   #15
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Like it or not Sirius and XM are ALLIES in a communications war that today includes huge terrestrial based corporations, and also internet and cable based companies. Not to mention the availability of radio delivered by the phone carriers. The FCC was set up in it's charter to be NON-POLITICAL. They are supposed to act in the interest of creating competition and fairness between bussiness interests and the public. A merger between Sirius and XM would go along way toward doing just that.

Last edited by hazzar; 01-05-2007 at 09:37 PM..
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