The FCC’s expected approval of the much-delayed merger between XM Satellite Radio and Sirius Satellite Radio likely won’t happen until late May or June after chairman Kevin Martin failed to distribute a draft ruling of the regulatory agency's conditional approval to other commissioners Wednesday night, according to equity research firm Stanford Group Company.
In a research note issued Thursday, analysts Clay and Fred Moran wrote that “it seems unlikely that the FCC will vote on the merger on its May 14 meeting. A ruling by late May or early June could occur.”
“We believe the FCC is highly likely to approve the merger with relatively modest conditions,” the research note continued.
The analysts maintain a “hold” recommendation and 12-month price target of $3 a share on Sirius shares, which closed up 8 cents, or 3%, to close at $2.73 a share in Thursday trading.
Exactly one month ago, the U.S. Department of Justice announced it had completed its investigation of the proposed merger—first announced in February 2007—and decided to take no action.
The DOJ concluded that the merger was not anti-competitive, leaving FCC approval as the last significant obstacle standing in the way of the $13.6 billion union.
Both XM and Sirius are home to the audio feeds of several cable networks, including CNN, Fox News Channel and CNBC.
The combined XM/Sirius would have more than 17 million subscribers and would be headed by current Sirius CEO Mel Karmazin. XM Satellite chairman Gary Parsons would retain that title with the new entity.
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