Karmazin: Sirius would like to buy XM Satellite Radio
CNNMoney.com
Karmazin: Sirius would like to buy XM Satellite Radio
Tuesday June 27, 8:10 am ET
Sirius Satellite Radio Inc. Chief Executive Mel Karmazin said Monday he would like to buy archrival XM Satellite Radio Holdings Inc., but price and regulatory hurdles would be issues.
Karmazin, speaking at a conference in New York, stressed, however, that Sirius's business plan "doesn't really involve our doing a deal" and also indicated he wasn't interested in Sirius being bought.
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"Regarding XM - would we like to buy them? Sure. We'd love to buy them. Price would matter, so that would be an issue... (and) there would definitely be the regulatory issue," he said.
"From our point of view, we don't see - other than if it was in the best interests of our shareholders - that we would be interested ever in being acquired," Karmazin added.
An XM spokesman said: "We do not comment on our competitors' wishful thinking."
XM leads Sirius in the young market for nationwide pay-radio, but Sirius's growth has been strong in the past year, powered in part by the launch of programming from Howard Stern. At the same time, XM has been stung by federal probes and concerns about its subscriber growth.
A combination of the two might be complicated by the fact that neither company has yet turned a profit. Moreover, XM's rich market capitalization is about $3.7 billion and Sirius's is even richer at around $6.3 billion, thanks to the market's anticipation of significant growth as demand for satellite radio spreads.
At the Convergence 2.0 conference, Karmazin said he is optimistic about the business and expects Sirius to reach revenue of $3 billion by 2010, up from about $242 million in 2005.
"Investors want to know if these companies can make money (and) are we going to get a return for investors," he said. "Right now the company is losing money, and that makes it hard to value."
Related: Static for Sirius and XM
