INSTANT VIEW: Sirius, XM deal gets U.S. antitrust clearance
WASHINGTON (Reuters) - U.S. antitrust authorities approved a proposed $4.38 billion purchase of XM Satellite Radio by Sirius Satellite Radio, the Justice Department said on Monday.
The deal is also being examined by the Federal Communications Commission, which is expected to follow the Justice Department's lead. The deal would combine the only two providers of satellite radio in the United States.
Sirius shares were up 10 percent to $3.19 and XM shares jumped 16.8 percent to $13.95, both on the Nasdaq.
COMMENTARY:
DAVID JOYCE, ANALYST, MILLER TABAK
"An FCC (decision) could come within days or a little longer than that.
"I've continued to believe it is a broad market in which Sirius and XM are competing. You've got iPods, online streaming, as well as terrestrial radio getting into HD radio. It's still a very healthy and vibrant market, but we are in a recession.
"It's been long anticipated. Anything from the bond side ... has already been worked on at this point.
"The net present value of synergies could be north of $3 billon. That should be viewed positively from bond holders, who will see that as a greater assurance of getting in their principle payments."
APRIL HORACE, ANALYST, JANCO PARTNERS
"Chairman Martin said on Friday he was in the process of drafting something regarding the merger and it could take the FCC a week to make a decision or it could take a month.
"The takeaway here is that historically the FCC does not go against the DOJ. We obviously think the two agencies have been talking and this is not necessarily a surprise to the FCC.
"What this does allow is for Sirius to continue to proceed on trying to get all the financial approvals that they need to obtain. Specifically, XM has some put options where the bondholders can put the debt back to XM if there's a change in control. What both companies are going to work fairly vigorously on is getting waivers on those particular put options. A lot depends on what the XM bondholders do."
DAVID BANK, ANALYST, RBC CAPITAL MARKETS
"We all along thought the probability was better than 50 percent that the deal would get through. Now it's past the DOJ, and we feel pretty optimistic it will get through the FCC. I don't think it has happened in my lifetime that the FCC found in a different manner than the DOJ in these matters. You never want to put a date on something, but I would say it could close sometime within the next quarter."
(Reporting by Paul Thomasch, Kenneth Li and Michele Gershberg in New York, editing by Peter Henderson)
