Merger path looks clear
Sirius, XM advance on optimismShares of the satellite radio companies advanced Wednesday on renewed confidence — fueled by comments made by top brass at Sirius and XM — that merger approval is forthcoming.
At the Bear Stearns 21st annual Media Conference, Sirius CEO Mel Karmazin said that he was hoping for a ruling by month's end. Karmazin's prediction seemed more specific than other statements he has made this year.
Sirius and XM agreed to a merger more than a year ago, though the FCC and Department of Justice have been taking their time to either approve or object to the plan.
However, Karmazin said the timeline could change, especially given that executives at both companies expected their merger to be accomplished four months ago.
Karmazin said that, if there was a serious problem, regulators wouldn't have taken "this long to figure it out."
The issue is whether the combination of Sirius and XM, the only satellite radio companies in the U.S., would create a monopoly that would harm consumers.
"Either you believe we compete with a whole bunch of audio choices or you think there's a distinct market called 'satellite radio,' " he said.
About 90 minutes later at the same conference, XM chairman Gary Parsons said the governmental review was proceeding "in a timely manner," which Wall Street seemed to interpret as a positive sign considering that executives at XM and Sirius previously complained that their merger request was basically stalled.
"We believe the DOJ has the information and feel the FCC has the necessary information, to complete their decision-making process," Parsons said.
Shares of XM rose 4.1% on Wednesday to $11.54, and Sirius shares were up 4.7% to $2.88.