More Trouble in XM-Sirius Merger? (SIRI, XMSR)

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MediaPost has a rather interesting article out today citing state attorneys general from four more states have joined ten others in their opposition of the merger between Sirius Satellite Radio (NASDAQ: SIRI) and XM Satellite Radio (NASDAQ: XMSR).

This article notes that the AG’s from Connecticut, Maryland, Ohio and Washington sent a 3-page letter to Kevin Martin, Chairman of the FCC, last week urging him to not approve the merger.  This also notes that the letter is almost identical to the one sent by 10 other AG’s that was sent at the end of March.

Interestingly enough and according to the article, these AG’s have all noted "If the merger gets a green light, however, the attorneys general added that the FCC should set aside part of the satellite-accessible spectrum for a free service to be started by a new third-party company." interviewed Rep. Gene Green regarding his stance on this merger and found that he was without care about the financial well-being of the satellite radio companies.  We’ll see  what happens sooner or later out of the FCC, but this merger has been one of the longest and most arduous mergers out there.  We do not consider this merger in the same realm of "satellite television" as people can live in their cars without satellite radio.  But tell someone they can’t have cable TV or satellite TV and see what happens.

Another issue we found interesting was that fairly recent downgrade from Goldman Sachs where the firm dislikes this either way, with merger and without merger.

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Jon C. Ogg
April 28, 2008

Jon Ogg produces and edits the Special Situation Investing Newsletter; he does not own securities in the companies he covers.