Analysts see doubt in Sirius-XM merger success
Thursday, April 26, 2007 at 8:07 AM
Tags: 2, XM
Three separate analyst's reports this week have cast serious doubt on whether the Sirius-XM merger will be approved by federal regulators.
Bank of America analyst Jonathan Jacoby put the probability of approval of the merger at about 35 percent, but noted that it was likely much lower. Meanwhile, Sanford C. Bernstein & Co senior analyst Craig Moffett, and William Kidd, media analyst with Wedbush Morgan Securities, put the chance of approval closer to 10 percent.
Jacoby also lowered the merger synergy assumptions from $5 billion to $3.6 billion, stating that sports rights fees could increase initially.
"The merger faces a very tough road at the FCC, where the public interest test applied by the commission is inherently subjective," Moffett said. "In Washington, 'subjective' is codeword for 'political.' "
"The fact that there are different pricing schemes means you can effectively bake in price hikes," Kidd said.
"Regulators can see that's a problem."
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Comments
"The fact that there are different pricing schemes means you can effectively bake in price hikes," Kidd said.
LOL, so now the argument against the merger shifts from being a monopoly to the consumer is too stupid because there are too many choices on tiered packages. What's next, the merger will cause impotency?
Posted by: Rich ? | April 26, 2007 8:31 AM
A nice article to start they day. Thanks! It would be so nice to just have this thing be blocked so we can continue focusing on bringing the best possible product to the consumer and having them have the choice of which provider does it better.
Posted by: History Guy ? | April 26, 2007 8:54 AM
Remember, the analysts are not the FCC or NAB. They are basing their probabilities based on the facts and prior mergers. The analysts are probably the most objective because their ultimate concern is whether or not stock investments are a good idea.
Posted by: JRT | April 26, 2007 9:13 AM
well the best stuff would come out of the merger...Enjoy paying twice the amount of money and carrying around two products just to hear your shows/sports/and music.
Fuck the FCC and teh NAB those crooked and corrupt bastards.
Posted by: dave | April 26, 2007 10:07 AM
...Enjoy paying twice the amount of money and carrying around two products just to hear your shows/sports/and music.
Fuck the FCC and teh NAB those crooked and corrupt bastards.
It would be in our best interest if it did go through.
Posted by: dave | April 26, 2007 10:08 AM
Good! a merge with xm would decrease the value of the BIG DOG, SIRIUS!
NO! to the merge
Posted by: hugh Panero (the X CEO of XM) | April 26, 2007 7:23 PM