XM-Sirius Submit Second Set of Documents to DoJ
XM and Sirius told the Securities and Exchange Commission they have complied with a second request for documents by the Department of Justice. Second requests are typical in mergers as big as XM-Sirius, said sources involved in the merger. But Stifel Nicolaus said the companies should hold off on plans for a victory celebration.
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“While it often [is] thought that the certification of compliance triggers a 30-day period in which the DOJ has to decide whether to sue to prevent the merger, the reality is that the companies legally cannot close until after the FCC has granted the petition to transfer the license,” the Stifel Nicolaus report said. “Thus the DOJ can, and in our view, is likely to take more than 30 days to make up its mind.” The firm warned investors that approval likely won’t turn on FCC review of the merger’s status under a digital audio radio service (DARS) order barring a single operator owning both services.
“We understand that some have indicated approval is less likely because of their read of the filings in the FCC proceeding on a possible rule/policy change,” the firm said. “We disagree for a number of reasons, including: that those filings don’t go to the core decision at the DOJ, which we believe will ultimately decide the matter.” The FCC never has turned down a merger approved by DoJ, the report said.