DolaMight
05-02-2007, 12:07 PM
New Twist in XM/Sirius Debate
--------------------------------------------------------------------------------
It may be just a rumor, but reports have surfaced that CBS could be interested in buying either Sirius or XM as a defensive move. With the Senate holding another hearing about the satellite radio merger earlier this week, and many believing that the quality of debate has failed to progress, the news of a possible CBS shakeup has caught the attention of analysts and investors alike.
According to a report on investment research website Briefing.com, CBS could make a bid for XM "and/or" Sirius sometime in the near future. At the time of the news breaking, both satellite radio companies' share prices were sagging by as much as 4 percent; after the story spread, both stocks rebounded to end the day relatively flat.
Wedbush Morgan Securities analysts William Kidd said if the rumor is in fact true, it would not be the first time that radio pondered teaming up with an "enemy" for a greater good. Case in point: Clear Channel being an investor in XM. The analyst estimates that one satellite subscriber translates into at least two terrestrial listeners, making the growth of satellite radio problematic for radio going forward. However, Kidd said the combination of local radio and a national satellite radio platform would be positive, "given not just the potential for terrestrial cannibalization, but also because of the synergies, such as the ability to port talent/content and leverage longstanding experience with ad sales and customer relationships."
The Wedbush analyst went on to say that he was skeptical CBS, or any other media player for that matter, would attempt to combine both Sirius and XM given all that has already gone down. If a competing bid were to emerge, Kidd said, the move would probably be for just one of the satellite radio providers.
Expanding on the buyout rumor, Kidd said that XM "is the more readily acquirable of the two, given that its shareholder base is more likely willing to vote with their feet" with regards to the company's recent competitive woes. At the same time, "if we were in the acquirer's seat, we would prefer Sirius even if it required a larger relative premium, given its content advantage and cost structure."
Finally, Kidd said some may argue that if CBS were to make a serious push to get into the satellite radio game, XM would be its natural preference, since Viacom's Sumner Redstone and Sirius' CEO Mel Karmazin share history. "We're skeptical of that history," he said, "thinking that the target's management would simply be restructured in an acquisition, regardless of whether the target was Sirius or XM."
SkyREPORT 04/19/2007 - New Twist in XM/Sirius Debate
by SkyREPORT E-News
--------------------------------------------------------------------------------
It may be just a rumor, but reports have surfaced that CBS could be interested in buying either Sirius or XM as a defensive move. With the Senate holding another hearing about the satellite radio merger earlier this week, and many believing that the quality of debate has failed to progress, the news of a possible CBS shakeup has caught the attention of analysts and investors alike.
According to a report on investment research website Briefing.com, CBS could make a bid for XM "and/or" Sirius sometime in the near future. At the time of the news breaking, both satellite radio companies' share prices were sagging by as much as 4 percent; after the story spread, both stocks rebounded to end the day relatively flat.
Wedbush Morgan Securities analysts William Kidd said if the rumor is in fact true, it would not be the first time that radio pondered teaming up with an "enemy" for a greater good. Case in point: Clear Channel being an investor in XM. The analyst estimates that one satellite subscriber translates into at least two terrestrial listeners, making the growth of satellite radio problematic for radio going forward. However, Kidd said the combination of local radio and a national satellite radio platform would be positive, "given not just the potential for terrestrial cannibalization, but also because of the synergies, such as the ability to port talent/content and leverage longstanding experience with ad sales and customer relationships."
The Wedbush analyst went on to say that he was skeptical CBS, or any other media player for that matter, would attempt to combine both Sirius and XM given all that has already gone down. If a competing bid were to emerge, Kidd said, the move would probably be for just one of the satellite radio providers.
Expanding on the buyout rumor, Kidd said that XM "is the more readily acquirable of the two, given that its shareholder base is more likely willing to vote with their feet" with regards to the company's recent competitive woes. At the same time, "if we were in the acquirer's seat, we would prefer Sirius even if it required a larger relative premium, given its content advantage and cost structure."
Finally, Kidd said some may argue that if CBS were to make a serious push to get into the satellite radio game, XM would be its natural preference, since Viacom's Sumner Redstone and Sirius' CEO Mel Karmazin share history. "We're skeptical of that history," he said, "thinking that the target's management would simply be restructured in an acquisition, regardless of whether the target was Sirius or XM."
SkyREPORT 04/19/2007 - New Twist in XM/Sirius Debate
by SkyREPORT E-News