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SIRIUS Approves Merger, But Will Regulators Care (SIRI, XMSR)
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SIRIUS Satellite Radio Inc. (NASDAQ:SIRI) announced that its stockholders voted to approve an amendment to its certificate of incorporation and the issuance of SIRIUS common stock to accomodate its merger with XM Satellite Radio Holdings Inc. (NASDAQ:XMSR). More than 96% of the shares voted were in favor of the merger.
If this merger goes through, XM Satellite Radio holders will receive a static 4.6 shares of Sirius Satellite Radio per XM share, and each shareholder group will own roughly 50% of the combined company. With Sirius stock trading at $3.51, this translates to an implied mnerger price for XM holders of $16.14. XM is trading at only $14.21 today.
- The proxy firms already suggested shareholders should approve the merger.
- CNBC recently noted some rumblings of a greater chance that it could close.
Unfortunately, the regulatory approval hurdles here are the big issue. It was overwhelmingly expected that both shareholder groups would approve the deal.
Jon C. Ogg
November 13, 2007
Jon Ogg produces the 24/7 Wall St. Special Situation Investing Newsletter; he does not own securities in the companies he covers.
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