XM and Sirius Still Waiting ...
By
Rick Aristotle Munarriz
April 29, 2008
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With so many uncertainties in the air, XM (Nasdaq: XMSR) is calling it off. No, I'm not talking about its planned combination with Sirius (Nasdaq: SIRI), silly. XM has been itching to get the merger done since it was announced more than 14 months ago. I'm talking about the company's annual meeting.
XM is postponing the annual shareholder event, originally slated for May 23. With last month's Department of Justice approval, XM is now just an FCC blessing away from clearing the two regulatory hurdles that threatened to doom the deal last year.
Meeting formally with investors doesn't make a lot of sense if the deal is about to get done. Sirius, set to stage its annual investor powwow a few days earlier, is also deferring its meeting. Shareholders of both companies already approved the merger last year, so what else is there to do beyond pacing back and forth in the FCC waiting room?
Investors shouldn't read anything into this morning's dual postponements. The FCC is still unlikely to block the merger, though it may impose a few competitive concessions. About the only thing we can infer from the decisions is that the deal doesn't appear ready to be derailed. If XM and Sirius were going to walk away from the deal, they would be trumpeting their annual shareholder meetings as a way to get investors onboard with their new plans.
It's been a long time since the deal was announced in mid-February of last year. XM and Sirius have kept their eyes on the prize, even while overcoming deal fatigue, mounting losses, and self-serving objections from terrestrial heavies such as Clear Channel (NYSE: CCU). The merger will get done. The companies have traveled too far -- and waited too long -- to be denied at this point.
Unfortunately, the clock just keeps ticking as the competitive landscape around them makes it that much harder to have an impact on every new eardrum. Let's hope the deal gets done while there's still time for the companies to be relevant.
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