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TORONTO — The Canadian merger of local licensees of Sirius Satellite Radio Inc. and XM Satellite Radio faces a major hurdle when the CRTC considers the transaction in March.
Canadian Satellite Radio Inc. and Sirius Canada Inc. are planning to tell Canada’s broadcast regulator that their deal will not reduce competition as both satellite radio services remain distinct and operate according to existing broadcast licenses.
Under the terms of their merger agreement, Sirius Canada shareholders are to receive treasury shares of Canadian Satellite Radio Holdings amounting to a 58 percent interest in the newly merged entity.
The Canadian Broadcasting Corp. will have a 15% equity interest in the new combination, based on its stake in Canadian Satellite Radio Holdings.
John Bitove Jr., who launched XM Canada in 2005, will hold a 22.7% equity stake in the new combination, while Sirius XM Radio Inc., the American owners of the Canadian radio brands, will assume a 37.1% equity stake.
The combined company will have about 1.7 million Canadian subscribers and, on a trailing 12-months basis, pro forma revenues at about $200 million, and pro forma EBITDA of about $7 million.
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