XM/Sirius Merger Looks Bleak, Analysts Say
Prospects for ultimate government approval of the merger between XM and Sirius Satellite look bleak, with reports issued Wednesday by three major analysts differing only on just how unlikely approval is, the Washington Post reported Thursday.
A trio of analysts- Jonathan Jacoby of Banc of America Securities, Craig Moffett of Sanford C. Bernstein Co. and William Kidd of Wedbush Morgan Securities- all put the likelihood of a merger very low. Jacoby put the probability at “35 percent, but probably lower,” while the other analysts both put the figure at around 10 percent.
The analysts cited the fall of both companies’ stock since the merger’s announcement, as well as the political climate at the relevant government agencies. In order to take effect, the merger would need to be approved by both the Justice Department and the FCC. Sirius CEO Mel Karmazin has already appeared before Congressional committees several times, even agreeing to concessions including rebates and price caps.