Analysts Doubt XM-Sirius Merger Will Fly

ANALYSTS DOUBT XM-SIRIUS MERGER WILL FLY
[SOURCE: Washington Post, AUTHOR: Sam Diaz]
It is unlikely that federal regulators will give a thumbs-up to a proposed merger between the XM and Sirius satellite radio companies, according to three analysts' reports issued this week. The separate reports, issued Monday as a preview to quarterly earnings announcements by XM today and Sirius on Tuesday, point to the drop in value of the shares of both companies -- about 30 percent each -- since the merger plan was announced Feb. 19. In a Banc of America Securities report, analyst Jonathan Jacoby put the probability of approval of the merger at about 35 percent, but noted that it was likely much lower. Separately, Craig Moffett, a senior analyst with Sanford C. Bernstein & Co., and William Kidd, a media analyst with Wedbush Morgan Securities in Los Angeles, put the chance of approval closer to 10 percent. A merger would need approval from the Justice Department, the Federal Communications Commission and shareholders. "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.'"
http://www.washingtonpost.com/wp-dyn/content/article/2007/04/25/AR2007042502590.html
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