Parsons Says XM-Sirius on Track to Complete Merger This Year
XM and Sirius seem on target to complete their merger by the end of 2007, XM Chairman Gary Parsons said Tuesday at a Goldman Sachs investors conference. One surprise has been the companies’ ability to line up consumer interest groups behind the merger, he said.
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“I've been a little bit pleasantly surprised, I will have to say, by the amount and diversity of support that we have gotten from consumer groups,” he said, citing endorsements by the NAACP, women’s and Christian groups, the League of Rural Voters and the American Trucking Association. “A lot of these groups look at the satellite radio industry and say this is something that’s important to my constituencies and these people have been delivering positive, niche programming,” said Parsons.
The companies finished complying with a second request for material by the Department of Justice, and the FCC has completed two comment cycles on the merger, Parsons said. A shareholder vote is likely in November. When announcing their merger in February the companies hoped it would be completed this year, Parsons said. “It is still our hope that that will be the case,” he said. “I would say at this point in time it’s still a reasonable expectation.”
Parsons believes he cut a good deal for XM shareholders in agreeing to a merger of equals with Sirius, he said. Sirius CEO “Mel Karmazin will… absolutely sit here and tell you his company was more valuable, it’s market cap was larger, it was growing faster,” Parsons said. “I will sit beside you… and say yes but our financials are far superior and our operational execution is better… If it had been a percentage point or two one direction or another it really would not matter in the longer term versus the significant, superior value that comes from the synergies that are able to be extracted from cooperating and working together.”
Meanwhile, Parsons told the Merrill Lynch Media & Entertainment Conference Tuesday that NAB’s display on its building in June of a sign reading “XM + Sirius = Monopoly” shows that broadcasters take the threat of a combined company seriously. “It is very clear that they view XM and Sirius as competition, and a combined XM- Sirius they view as more significant, worrisome competition, and there’s the visceral nature to try to stop it,” he said.
RadioShack said it endorses the merger, joining consumer electronics retailers Crutchfield Corp. and Circuit City and vehicle makers American Honda, Toyota and Hyundai.