Satellite Radio Rivals Sirius, XM Seek Merger

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Satellite radio rivals XM Satellite Radio Holdings and Sirius Satellite Radio are seeking to merge their operations but may face antitrust hurdles in completing such a deal, news reports said Tuesday.The company's said the deal would be a “merger of equals,” the Wall Street Journal reported. Sirius Chief Executive Officer Mel Karmazin would be the merged firm’s CEO and Gary Parsons, XM’s chairman, would take that role in the new entity, the Washington Post reported.Federal Communications Commission rules bar a single company from controlling the satellite radio market but FCC Chairman Kevin Martin said recently that such rules can be changed, the Post reported.Many truckers use the company’s services, though the two do not break out subscribers by commercial vehicles. As of the end of last year, Sirius had about 6 million subscribers while XM’s were approaching 8 million, the New York Times reported.The Times, the Journal and the Post all reported the story on their front pages Tuesday.The proposed merger would allow customers, who pay about $13 a month for subscription services, to choose a cafeteria-style range of channels, the Post said.Under the deal, XM shareholders would receive 4.6 shares of Sirius stock for every share they own, valuing the company at $4.57 billion, or $17.02 per share, based on Friday's closing price for Sirius shares, the Associated Press reported.That gives XM shareholders a premium of 22% to the $13.98 closing value of XM's stock on Friday. Its shares jumped $1.52 or 11% to $15.50 in early trading Tuesday, while Sirius' rose 23 cents or 6% to $3.93, AP reported.