Satellite Radio Merger in 2007?
From SkyReport.com 1-12-07
Some think the merger of Sirius Satellite Radio and its rival XM will never garner enough support in Washington to allow a lone satellite radio company. Others say considering the entire landscape of digital music, a merger between the two yet-to-be profitable companies makes perfect sense and it could happen as soon as this fall.
Citigroup analyst Eileen Furukawa this week raised her 12-month price target on XM by $5 per share telling clients at an investor conference that she sensed an increased openness on the company's consideration of such a merger. On hand at the event: XM Chairman Gary Parsons and CFO Joe Euteneuer.
While it is true that the combination of the two satellite radio players would face some hurdles, Furukawa believes if the companies worked to resolve differences on how they count subscribers and pricing concerns, the deal could be beneficial for both sides. The companies could accomplish a great deal of cost-cutting by joining forces in areas like programming, marketing and satellite business, she said.
The analyst said XM believes 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 - one including terrestrial radio, iPods and MP3 players, HD radio and internet radio. The regulatory wildcard, so to speak, remains with the FCC, Furukawa said.
She also said both XM and Sirius would have to reconcile several matters. For example, XM would probably demand a substantial premium if it were to be acquired by Sirius. Also, the two companies have different ways of separating line items on their financials. Furukawa maintained her "buy" rating on XM's stock and raised her price target to $21 from $16.
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So, what do you think of this?
Dish Network & DirecTV are still trying to work out their venture to merge even after that failed prior.
What chance do you think XM & Sirius have?
From SkyReport.com 1-12-07
Some think the merger of Sirius Satellite Radio and its rival XM will never garner enough support in Washington to allow a lone satellite radio company. Others say considering the entire landscape of digital music, a merger between the two yet-to-be profitable companies makes perfect sense and it could happen as soon as this fall.
Citigroup analyst Eileen Furukawa this week raised her 12-month price target on XM by $5 per share telling clients at an investor conference that she sensed an increased openness on the company's consideration of such a merger. On hand at the event: XM Chairman Gary Parsons and CFO Joe Euteneuer.
While it is true that the combination of the two satellite radio players would face some hurdles, Furukawa believes if the companies worked to resolve differences on how they count subscribers and pricing concerns, the deal could be beneficial for both sides. The companies could accomplish a great deal of cost-cutting by joining forces in areas like programming, marketing and satellite business, she said.
The analyst said XM believes 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 - one including terrestrial radio, iPods and MP3 players, HD radio and internet radio. The regulatory wildcard, so to speak, remains with the FCC, Furukawa said.
She also said both XM and Sirius would have to reconcile several matters. For example, XM would probably demand a substantial premium if it were to be acquired by Sirius. Also, the two companies have different ways of separating line items on their financials. Furukawa maintained her "buy" rating on XM's stock and raised her price target to $21 from $16.
-----------
So, what do you think of this?
Dish Network & DirecTV are still trying to work out their venture to merge even after that failed prior.
What chance do you think XM & Sirius have?