SATELLITE RADIO STOCKS PULL BACK David B. Wilkerson – MarketWatch Shares of XM Satellite Radio Inc. and Sirius Satellite Radio Inc. headed lower Wednesday amid worries that their proposed merger may not get approval from regulators.
XM shares slid 5.3% to $14.60 after gaining 10% on Tuesday, while Sirius shed 3.3% to $3.79 following a 6% advance in the previous session.
Under the proposed deal, investors in XM would get 4.6 shares of Sirius common stock for each XM share they own. The $13 billion transaction includes debt of about $1.6 billion.
But analysts say the deal is unlikely to gain approval by the Federal Communications Commission and the U.S. Department of Justice, who may object to the reduction of the satellite radio market from two players to one.
Media and entertainment stocks were broadly lower on the session, with diversified giants Walt Disney Co., News Corp. and Time Warner down marginally.
Meanwhile, Warner Music Group was up 5% at $20.11. The company said any possible takeover bid for U.K. music behemoth EMI Group would be solely in cash. On Tuesday, Warner announced that it has made a bid approach to EMI. |