Sirius sees $400 mln in 2009 savings after XM deal

NEW YORK (Reuters) - Sirius Satellite Radio Inc said on Monday it expects to save $400 million in 2009 as a result of its proposed acquisition of XM Satellite Radio Holding Inc, which is still being scrutinized by federal regulators.

The combined company expects in 2009 to earn $300 million in net income before interest and investment income, and interest, depreciation and non-cash stock compensation expenses, otherwise known as adjusted EBITDA, Sirius said.

Analyst April Horace of Janco Partners said the $300 million figure was "within a reasonable range" of analysts' average estimate of $241 million.

However she noted that the estimates of the combined companies' 2009 adjusted EBITDA vary widely, with the most optimistic forecast at $441 million.

"The range between the high and the low is 120 percent," she said in a note to clients. Horace continues to rate Sirius shares at "accumulate."

Sirius said its estimates assume the deal, announced in February 2008, will close in the third quarter, which starts on Tuesday. The pact still requires the approval of the U.S. Federal Communications Commission.

While not guaranteed, the deal earlier this month appeared to move closer to consummation after FCC Chairman Kevin Martin said he would support it, with the companies agreeing to a series of conditions.

Sirius added that the combined company is expected to achieve positive free cash flow, before satellite capital expenditures, in the full year 2009.

Shares of Sirius slipped 13 cents, or 6.2 percent, to $1.97 on Nasdaq on Monday afternoon. XM shares fell 5 cents to $8.02.

(Reporting by Franklin Paul, editing by Dave Zimmerman/Jeffrey Benkoe)