UPDATE: IT’S OFFICIAL: XM announced the companies will be combined in a tax-free, all-stock merger with a combined enterprise value of approximately $13 billion, which includes net debt of approximately $1.6 billion. Sirius says the merger will enable the combined company to develop and introduce a wider range of lower cost, multi-functional devices.
The two sides were locked in negotiations over the weekend trying to hammer out a final agreement with an eye toward going public with the merger today in Washington, D.C., where XM is based, this source said.
Combining Sirius and XM would result in a single satellite radio operator with more than 12 million total subscribers. A deal would also marry Sirius content, such as Howard Stern, Frank Sinatra and Nascar with XM’s Oprah Winfrey, Bob Dylan and Major League Baseball.
Analysts widely predict that a deal would also save the two companies nearly $7 billion annually.
Gaining regulatory approval “could take up to 15 months”.
Datacasting cartoons for backseaters could be one avenue Sirius/XM will pursue.
Both are under fire due to their powerful satellite repeaters which can push out more than 2000 watts EIRP, overpowering two-way, 2.3 GHz WCS wireless broadband radios that AT&T claims can supply competitive broadband wireless services.
AT&T is selling it’s 2.5 GHz wireless spectrum to Clearwire for $300 million in cash, reports Reuters. Shares of Clearwire’s IPO will be priced between $23 and $25 a share, which could raise up to $575 million for the Kirkland-based company.
When AT&T acquired BellSouth late last year, part of the deal was to sell all 2.5 GHz spectrum licensed to or leased by BellSouth. The spectrum includes Broadband Radio Service spectrum, which is used for commercial delivery of high-speed wireless broadband services and Education Broadband Service (EBS) spectrum. Groups holding EBS licenses may lease portions of their spectrum to commercial operators.
The sale to Clearwire will increase their holdings about 14.2 percent and is expected to be final by June. But it does not include the 2.3 GHz spectrum that BellSouth uses in about 15 markets and that is adjacent to the satellite radio frequencies.
The FCC is requiring AT&T to offer service by mid-2010 to 25 percent of the population in the service area where it continues to own spectrum.