XM, Sirius Shareholders to Vote on Deal
Thursday, October 4, 2007; 1:04 PM
WASHINGTON -- Shareholders of the nation's only two satellite radio companies are scheduled to vote Nov. 13 on Sirius Satellite Radio Inc.'s proposed multibillion-dollar acquisition of XM Satellite Radio Holdings Inc.
The deal still requires approvals from the Federal Communications Commission and Justice Department, which are looking into the transaction for potential antitrust implications that some fear could lead to higher prices for consumers.
The date of the shareholder vote was announced by New York-based Sirius a Securities and Exchange Commission filing late Wednesday.
XM shareholders must vote in favor of the buyout, while Sirius investors must approve the issuance of shares and other related matters. XM shareholders of record at the close of business Monday and Sirius stockholders as of Tuesday are eligible to vote.
The deal is structured to give existing XM and Sirius shareholders roughly 50-50 ownership in the combined company. Under the deal, XM shareholders would get 4.6 Sirius shares for each XM share. The deal values XM at $15.92 a share based on Sirius' closing price Wednesday.
Both companies filed an application with the FCC to transfer radio licenses to a new combined company. In 1997, the FCC granted the licenses to both companies on the condition they never combine to create a potential satellite radio monopoly.
Now, the FCC, which is reviewing the deal and could take until the end of the year or longer, must decide if transferring both licenses to one company is in the public interest.
Mel Karmazin, Sirius's chief executive who would run the combined company if the deal goes through, has argued that new technology, such as high-definition radio, Internet-based radio and Apple Inc. iPods, provide significant competition.
Sirius and Washington-based XM have said they want to close the deal by the end of the year.
The deal, which was valued at $4.57 billion when it was announced in February, has faced significant opposition from federal lawmakers, who have disputed the companies' claim that the combination would not eliminate competition or lead to higher prices.
The radio industry has also railed against the deal because it said the combination would create a monopoly.