Thursday, September 6, 2007 at 9:58 AM
XM Sirius merger
The Sirius Satellite Radio and XM Satellite Radio could be nearing its final stages with in the next 30-60 days, with the probability of a favorable ruling being greater than 50%, according RBC Capital Markets analyst David Bank.
In a client note issued today, David Bank wrote that the Department of Justice ruling could come within the next 30-60 days. Generally, the DOJ starts a 30-day "shot clock" that ends in a final decision once parties have complied with the Second Request. Both Sirius and XM certified they are in compliance with the Second Request yesterday.
While it's possible for DOJ to stop the clock, RBC wrote that their sources "indicate odds don't favor DOJ pushing for prolonged extension."
RBC sources also indicated that the DOJ "has reasonable room to rule that XM/SIRI competes in a broader audio entertainment market."
The FCC will obviously still weigh in on the merger itself, but historically the FCC doesn't give a conflicting ruling against the DOJ. With the added public interest benefit of Sirius-XM's a la carte pricing, RBC puts the probability of favorable ruling at over 50%.
I'm betting on approval.
They've proven that one strong company benefits consumers more than two weak ones.
Plus, it's being endorsed by politicians, minority groups, and even the formal head of the FCC under Reagan.
I just wonder what the new name will be... Will they try to squish their existing names into a strange way, or come up with something completely new and catchy?
