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Hot off the press

February 20, 2007

Dear XM Radio Subscriber:

We want to share with you some exciting news: Yesterday, in Washington DC, we announced
XM Radio will be merging with Sirius Satellite Radio to form the premier digital audio
service.

The merger will create a satellite radio company that will provide consumers across the
country with more and better premium radio programming. The combined company will be able
to compete better in what has become a very complex and dynamic entertainment market.

Where today our exclusive contracts mean you had to choose between baseball and football
or Oprah and Martha Stewart, the new company will seek to ensure that in the future, you
will be able to access both companies' programming. And, once we are fully integrated,
those of you who have factory-installed satellite radio will no longer be limited to the
programming provided by the exclusive satellite radio service chosen by their car
manufacturer.

This merger should be completed in late 2007 or early in 2008. Throughout the year, we
will provide updates on how the merger is progressing and information will be available at
our website, www.xmradio.com.

Between today and the merger date, as well as during the period immediately after the
merger date, all of your services will remain the same. The channel lineup, the customer
service number, the great music technology, and the XM Radio web site will all remain
unchanged and there will be no disruption to service. But, if you have questions,
information will be available and maintained on our website, and you can contact our
Listener Care team at 800-XMRADIO, with questions and concerns.

XM Radio continues to be committed to providing you the highest quality audio
entertainment and customer service available today. After the merger, our new company
will be able to offer you the most exciting listening experience in radio.

Sincerely,

Hugh Panero
CEO, XM Satellite Radio
 

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It's a long-shot that this will get FTC approval. Dish Network and Direct TV tried this 5-6 years ago and the FTC shot it down due to a violation of ant-trust laws. The merger would form a monopoly for satellite radio, but XM and Sirius's argument will be that they compete with all digital radio formats, including Ipod, HD radio, and CDs.
I hope it goes through... I'm a stockholder! :D
 

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As a Sirius Subscriber, I got the same exact email except instead of XM slant, it was Sirius.

Mine was from Uncle Mel Karminzin.
 

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Wonder just what they meant by this:

"those of you who have factory-installed satellite radio will no longer be limited"
 

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Josmas said:
It's a long-shot that this will get FTC approval. Dish Network and Direct TV tried this 5-6 years ago and the FTC shot it down due to a violation of ant-trust laws. The merger would form a monopoly for satellite radio, but XM and Sirius's argument will be that they compete with all digital radio formats, including Ipod, HD radio, and CDs.
I hope it goes through... I'm a stockholder! :D

I'm stockholder too, but my guess I'm on the wrong side... :(
Normally when it happens, the buyer goes down a bit and the sold goes up good.... today wasn't like that:
XM Satellite rose $1.43, or 10.2 percent, to $15.41, and Sirius Satellite rose 22 cents, or 6 percent, to $3.92.
 

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I think the buy-out is $17.00 a share.
With only one satellite option available (if the merger goes through) I would think in the long term this would be good, especially since their subscriber base would more than double overnight... very attractive to advertisers.
 

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Lonewuff said:
Wonder just what they meant by this:

"those of you who have factory-installed satellite radio will no longer be limited"
In their webcast this morning they said they are committed to maintaining the full constellation of satellites for both companies. They will continue to broadcast to hardware that supports either service, but will consolidate programming. This means that your current receiver will continue to operate, but when the merger is completed the same programming will be broadcast to both sets of hardware for the foreseeable future. They do not want to lose any of the current subscriber base by making any equipment obsolete. In the long term, to cut costs, there will likely be dual mode radios and an eventual retirement of one of the satellite constellations.
 

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Josmas said:
I think the buy-out is $17.00 a share.
With only one satellite option available (if the merger goes through) I would think in the long term this would be good, especially since their subscriber base would more than double overnight... very attractive to advertisers.
I could not find that information about the buy-out price...
If it's $17 then it's a great price, but don't you think it is quite high? the sirius shares once toped $9.00 and then was just down-hill.
Also, for todays market reaction, I'm not sure if it will get $10.00 by the 12 months they announced for the sale...
 

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This from Marketwatch:
"Under the terms of the agreement, XM shareholders will receive a fixed exchange ratio of 4.6 shares of Sirius common stock for each share of XM they own. XM and Sirius shareholders will each own approximately 50 percent of the combined company."

Sirius closed at $3.92 today. X4.6 =$18.032
 

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Hope it woks out for the consumer

I've had Sirius for several years. I hope that I can reap the benefits of gaining XM. I personally enjoyed "air america" and lost it, and later one of my favorite programs to XM. I have always been jealous of MLB being on XM, so maybe I can listen to Skip, Chip and the others on braves broadcasts.

The release I saw said subscribers can choose "a la carte" as to what channels they have, I feel this is corporate speak for charging me more--hope not.
 

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Josmas said:
This from Marketwatch:
"Under the terms of the agreement, XM shareholders will receive a fixed exchange ratio of 4.6 shares of Sirius common stock for each share of XM they own. XM and Sirius shareholders will each own approximately 50 percent of the combined company."

Sirius closed at $3.92 today. X4.6 =$18.032

I read that different... Please correct me if I'm wrong:
XM Shareholders will get Siruios stock. For me it means:
XM $15.41 will get 4.6 sirius at $3.92 = $18.032 that means XM will grow 17%

At that price, if you have Sirius, your share will worth $3.91 (18.032/4.6).

Am I right?
I'm seeing it from the view of a Sirius shareholder.
 

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I'm sure there is someone on the board that is more experienced in the stock market than I am who could answer these questions more clearly.

The way I understand it is, for each share of XM that you own, you would receive 4.6 shares of Sirius stock. Based on yesterday's close, that would be worth $18.032 worth of Sirius/share of XM.
I believe that the Sirius shares that we own will only be effected by regular market fluctuations.
The question is, how many outstanding shares are there of Sirius and will they need to do a split to provide enough to shares to replace each XM share x4.6?
 
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