XM Shares Fall as Sirius Merger Remains Stalled
Sirius chief Mel Karmazin would not speculate on approval of the merger.
(Lawrence Jackson - AP )
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Thursday, January 10, 2008; Page D04
Shares of XM Satellite Radio Holdings, the largest U.S. satellite radio service, fell the most in 4 1/2 years yesterday, signaling that investors are wondering whether the company's $4.31 billion merger with Sirius Satellite Radio will go through as planned.
XM closed down 68 cents, or 5.9 percent, to $10.77. During the day, shares were down 16 percent, the most since August 2003.
The District company is awaiting regulatory approval in an all-stock deal in which XM investors would receive 4.6 shares of Sirius for each XM share they own. Sirius chief executive Mel Karmazin said yesterday that he could not predict whether regulators would approve the deal this month.
Sirius shares closed down 13 cents, or 4 percent, to $2.83, after falling as much as 10 percent during the day.
The difference between the XM share price implied by the terms of the sale and the actual price widened to the biggest ever during the day, according to Bloomberg data.
"Amidst a weaker economic environment with slower consumer spending, we believe satellite radio fundamentals are likely to be further pressured," Goldman Sachs said in a report yesterday.
