The deal would consolidate the only two companies in the emerging business of subscription-only satellite radio, and is sure to face tough scrutiny from federal regulators. Investors and analysts have been speculating about a deal for months."
"XM and Sirius have both posted significant financial losses as they built up their programming lineups and recruited subscribers. Both stocks declined more than 40 percent last year on concerns about their continued growth in subscribers and softness in the retail market, but investors have held out hopes that a merger could bring costs down significantly.
Shareholders of XM and Sirius would each own approximately 50 percent of the combined company. XM shareholders would receive 4.6 shares of Sirius stock for each share of XM they own.
That would value XM shares at $17.02 each, based on Friday's closing prices, representing a premium of 22 percent from XM's closing value of $13.98 Friday. Markets were closed Monday for the Presidents' Day holiday.
The companies didn't say what the new company would be called, though they described it as a merger of equals. The new company's board will have 12 members, including Parsons, Karmazin, four independent directors named by each company, and one representative each from General Motors Corp. and Honda Motor Co."
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