Echostar Looking to Acquire Sirius XM? [Archive]

xmguy

02-05-09, 09:25 AM

source; Orbitcast.com

"
According to the Wall Street Journal (http://online.wsj.com/article/SB123380657213851075.html), Charles Ergen's EchoStar Corp. has been accumulating substantial portions of debt from Sirius XM Radio Inc. in what could be the first move in an attempt to take over the company.

Charles Ergen, who himself is the 87th richest man in the world (net worth of $9.5 billion (http://www.forbes.com/lists/2008/10/billionaires08_Charles-Ergen_FXHG.html)) and controls a satellite empire surrounding Dish Network and EchoStar, has recently acquired part of the $300 million of Sirius XM debt (http://www.orbitcast.com/archives/report-sirius-xm-in-advanced-discussions-over-debt.html) that matures on February 17th, according to WSJ's sources.

Sirius XM has worked down the total debt to about $175 million (http://www.orbitcast.com/archives/mel-karmazin-works-down-more-debt-hartleib-wants-to-see-his-book.html), but it isn't clear whether Ergen participated in that exchange. The Wall Street Journal reports that Ergen could also be buying up the senior bank debt due in May.Edited for possible copyright violation. More at the link below.

hdtvfan0001

02-05-09, 10:00 AM

That's a mountain load of speculation there....

Put another way....a whole lotta ducks needed in a row...:D

Richard King

02-05-09, 10:02 AM

Link to story:
http://www.orbitcast.com/archives/report-echostar-could-be-attempting-to-take-over-sirius-xm-radio.html#more

Richard King

02-05-09, 10:21 AM

http://blogs.wsj.com/deals/2009/02/05/sirius-xm-an-echostar-takeover-bring-it-on/

Richard King

02-05-09, 10:24 AM

merged threads

haloguy628

02-05-09, 01:56 PM

Ergen's EchoStar buys Sirius debt (http://www.denverpost.com/breakingnews/ci_11636138)

From Denver Post

Sirius XM Radio Inc., the satellite- radio broadcaster, rose as much as 43 percent in U.S. trading on a Wall Street Journal report that EchoStar Corp. bought a stake in its maturing debt.

EchoStar, the satellite-television group run by Charles Ergen, acquired part of a $300 million tranche maturing Feb. 17, the Wall Street Journal reported, citing people familiar with the matter. It isn't clear if Ergen participated in a debt-for-equity exchange that cut the debt outstanding to about $175 million, the Journal said.

Sirius XM advanced 5 cents to 19 cents at 10:21 a.m. New York time in Nasdaq Stock Market composite trading after rising as high as 20.4 cents, a two-month high. Before today, the stock had slumped 91 percent since the merger of Sirius and XM Satellite Radio Holdings Inc. was completed in July.

The company is facing about $925 million in debt repayments this year. Over the past month, the broadcaster has been exchanging debt for shares to reduce the debt due in two weeks. The stock has traded below $1 since Sept. 20 on investor concern that Chief Executive Officer Mel Karmazin may not be able to manage the debt and meet growth projections.

Echostar may be pursuing a plan to use the debt as a way to control Sirius XM inside or outside of bankruptcy, the Journal reported.

Patrick Reilly, a spokesman for Sirius XM, didn't immediately return a phone call and an e-mail seeking comment, neither did Kathie Gonzalez, a spokeswoman for EchoStar.

jacmyoung

02-05-09, 02:20 PM

Charlie can use that three geostationary satellites.

BJK

02-05-09, 03:31 PM

This also received mention on CNBC today.

BJK

djlong

02-06-09, 07:23 AM

There are more than 3 satellites. The XM side of Sirius XM had 4 satellites (Rock, Roll, Rhythm and Blues) and I think an on-ground spare. The Sirius side had at least 3 satellites in an inclined orbit and I don't know how many (if any) spares.

Ken S

02-06-09, 07:59 AM

rocatman

02-06-09, 02:44 PM

Another factor is that Dish could gain launch slots this year for perhaps the E-14 and E-15 satellites. Sirius has a satellite scheduled to be launched on a Proton in early June of 2009 and XM has a tentative launch by Sea Launch at the end of this year. The current Sirius and XM satellites on-orbit are not that old, less than 10 years so a delay should not effect current services. It would all depend if Dish satellites would be ready to go. Dish could also allow the Nimiq 5 satellite to move up its launch date from early August to early June on the Proton and Dish could launch E-14 in early August. As a side note, the Sirius and XM satellites are S-band not Ku/DBS band. In addition, Dish has a S-band satellite in storage, the one that they were building for the Chinese to support the 2008 Summer Olympics that was never launched.

Dolly

02-06-09, 04:16 PM

It appears that Echostar (Owner of Dish Network and Sling) is making a run at controlling SiriusXM.

http://www.washingtonpost.com/wp-dyn/content/article/2009/02/05/AR2009020502150.html

Just noticed this post was moved from the Sirius XM forum to the Dish Network area...Sirius XM is not a Dish Network product or service. I would think this news really belongs in the other forum.
Well Dish does have the Sirius radio channels, but Ken S for once I agree with you. This needs to be in the Sirius XM Forum first and if a thread is wanted in this Dish Site have one here as well. It's interesting Mr. King is a Dish customer and Dish's owner could be trying to wipe out Sirius XM which Mr. King also has. It certainly is a small world, isn't it? This is my one and only post in the Dish Forum. I'm not a Dish customer so I don't think I belong in this Forum. However, I am a Sirius XM
customer and since this thread was moved here this is where I had to post.

ThomasM

02-06-09, 07:35 PM

Dolly

02-07-09, 03:46 AM

This is terrific news! I am a Sirius-XM and DirecTV sub so if this happens I'll probably have Sirius-XM AND a new digital audio service on DirecTV. (You really don't think DirecTV will keep Sirius-XM audio channels if Echostar takes over do you? :D
I hate to put this in the Dish Forum, but since the thread was moved here I have to post it here. Personally I think DirecTV had better keep it's eye on Charlie because at this point it isn't possible to really know what he is up to :rolleyes:

Richard King

02-07-09, 06:28 AM

Not that this is on topic, but this ended up here because there were links and stories posted in both forums. All posts got merged into the thread here since it is Echo "buying" SiriusXM, not the other way around. I also left a forwarding link in the other forum to this thread. (I'll go ahead and sticky that link if I can so that it doesn't roll off the page).

Back to the topic at hand.

Edit: can't sticky, but it won't roll off the page anytime soon.

Richard King

02-07-09, 06:33 AM

Personally I think DirecTV had better keep it's eye on Charlie because at this point it isn't possible to really know what he is up to :rolleyes:That's why I sold my stock in Dish a while back. He's totally unpredictable and, I think, has been making some sirius (;)) mistakes lately.

SamC

02-07-09, 07:36 AM

Christopher Gould

02-07-09, 04:32 PM

I am no expert, and would be interested in someone that is commenting, but there is no way to repurpose the XM or SSR system for video. And the FCC and CRTC would have to approve repurposing, and thus the shut down of XM or SSR, anyway. So a buy would not be of the sats, but of the, still grossly unprofitable, services.

If that is so, then good luck to him. The Market may just be saying that it does not have a critical acceptance number for SR in it.

Sirius is already doing video. The market already has enough numbers to make profit, the problem is the debt. If there was no debt(because of management mistakes over spending) satellite radio would be making a profit.

Richard King

02-09-09, 07:43 AM

http://www.reuters.com/article/businessNews/idUSTRE51826M20090209?feedType=nl&feedName=usbusinessearly
Sirius got, and rebuffed, Ergen bid: report
(Reuters) - Satellite mogul Charles Ergen made an unsolicited offer late last year to take control of Sirius XM Radio Inc, and was rebuffed, the Wall Street Journal said, citing people familiar with the situation.

Ergen proposed for one of his satellite companies -- EchoStar Corp or Dish Network Corp -- to inject enough capital into Sirius for it to meet its debt obligations and avoid a bankruptcy filing, the newspaper cited the people as saying.More...

DCSholtis

02-09-09, 10:07 AM

http://www.reuters.com/article/businessNews/idUSTRE51826M20090209?feedType=nl&feedName=usbusinessearly
Sirius got, and rebuffed, Ergen bid: report
More...

http://finance.yahoo.com/news/15-Companies-That-Might-Not-usnews-14279875.html

Sirius Satellite Radio. (SIRI - parent company; about 1,000 employees; stock down 96%). The music rocks, but satellite radio has yet to be profitable, and huge contracts for performers like Howard Stern are looking unsustainable. Sirius is one of two satellite-radio services owned by parent company Sirius XM, which was formed when Sirius and XM merged last year. So far, the merger hasn't generated the savings needed to make the company profitable, and Moody's thinks there's a "high likelihood" that Sirius will fail to repay or refinance its debt in 2009. One outcome could be a takeover, at distressed prices, by other firms active in the satellite business.

jacmyoung

02-09-09, 10:56 AM

Well Sirius seems to have only two options now, file for bankruptcy, or work out a deal with Charlie.

It is not clear how much of the Sirius assets can be used for DBS video service, but even if it is only good for radio service, as long as Charlie can buy it cheap, why not? Having the control over satellite radio, blasting Dishnetwork ads and services to those that listen to the XM radio on the road while collecting monthly fees.

FTA Michael

02-09-09, 12:19 PM

http://www.reuters.com/article/businessNews/idUSTRE51826M20090209?feedType=nl&feedName=usbusinessearly
Sirius got, and rebuffed, Ergen bid: report
More...If you pick up today's WSJ, or if you subscribe to the online version, you can read all of the story: http://online.wsj.com/article/SB123413823508461499.html

I have zero inside information about this, but from a reporter's perspective, the way the article is written is entirely consistant with Ergen having told the writer what his plans are, but not for attribution. If it wasn't him, then it was someone with intimate knowledge of (or a willingness to lie about) his recent actions and underlying strategies. Occam's razor = Ergen off the record, but yaneverknow.

IF that's true, then it's become pretty clear how this will play out. One of Ergen's companies will acquire Sirius XM on or before Feb. 17, and then he'll have to persuade the feds to let him keep it.

ercjncprdtv

02-09-09, 07:39 PM

That is why I have switched to my iPod and HD Radio for my music...I knew that SiriusXM would be gone from DirecTV sooner than later and ol' Charlie The Dish has just confirmed it! :nono2:

Richard King

02-10-09, 05:47 AM

Actually, I suspect Charlie would want to keep it on Directv. I suspect that that is a very good promotional outlet for the service.

jacmyoung

02-10-09, 07:51 AM

Actually, I suspect Charlie would want to keep it on Directv. I suspect that that is a very good promotional outlet for the service.

Of course, but DirecTV can react to such plan.

4HiMarks

02-10-09, 08:30 AM

So if this happens, will I get a discount on Sat radio hardware or service included as part of my Dish subscription? If not, then I have zero interest.

Richard King

02-10-09, 09:05 AM

So if this happens, will I get a discount on Sat radio hardware or service included as part of my Dish subscription? If not, then I have zero interest.
The word is that the acquiring company would be Echostar, not Dish. Since they are no longer one and the same I doubt that it would have much of an effect on Dish. Also, since they can't make a profit as they now stand, I doubt that there would be many deals to be had if Echostar takes them over.

phrelin

02-10-09, 09:26 AM

The word is that the acquiring company would be Echostar, not Dish. Since they are no longer one and the same I doubt that it would have much of an effect on Dish. Also, since they can't make a profit as they now stand, I doubt that there would be many deals to be had if Echostar takes them over.Not to mention the fact that DISH has no cash to spare while Echostar has some, not alot, but some....

barryb

02-10-09, 09:34 PM

Looks like it may happen "cheaper" now, if it does happen:

http://www.nytimes.com/2009/02/11/technology/companies/11radio.html?_r=4&ref=technology

Richard King

02-11-09, 06:45 PM

Moving back to SiriusXM forum because the plot has changed per the next message.

Richard King

02-11-09, 06:46 PM

http://custom.marketwatch.com/custom/tdameritrade-com/html-story.asp?guid={b4f5102c-b702-4551-9bcd-34c18f50b7b9}
Sirius XM Holds Talks With Liberty Media, DirecTV - Reports

The plot thickens....
Liberty Media Corp. is in preliminary talks with Sirius XM Radio Inc. (SIRI), the New York Times reported Wednesday, citing unnamed people briefed on the negotiations. The Times didn't elaborate on the nature of the talks. In addition, Sirius XM Chief Executive Mel Karmazin recently asked DirecTV Group Inc. (DTV) to buy the company in a bid to avoid filing for bankruptcy or entering into a deal with EchoStar Corp. (SATS), the New York Post reported Wednesday, citing unnamed sources. A deal with DirecTV is more preferable because merging with EchoStar means that Karmazin would have to give up control or be forced to leave the company, the Post said on its Web site. More... .

Dolly

02-11-09, 06:55 PM

That's why I sold my stock in Dish a while back. He's totally unpredictable and, I think, has been making some sirius (;)) mistakes lately.
!rolling Mr. King you are so funny and smart also :sunsmile: I hope my post about the thread being removed didn't sound nasty I don't want my Underground Garage pal mad at me. Anyway someone else started a thread about Sirius XM not making it in 2009 or something to that effect in the Sirius XM Forum
so I hope that thread stays there. I think the problem is it is difficult in a Forum with both D* and Dish people to talk about this situation--now if it were John Smith from Cleveland buying up the debt it wouldn't be so difficult. I bet Mel would like a John Smith buying up the debt instead of Charlie :lol: But Mr. King you are handling the situation well so thank you :sunsmile: One thing I have found most interesting about this is the fact that Charlie has so much money :eek2: I had no idea that he was that well off :eek2: :eek2: :eek2:

Steve615

02-11-09, 06:56 PM

Dolly

02-11-09, 07:06 PM

Actually, I suspect Charlie would want to keep it on Directv. I suspect that that is a very good promotional outlet for the service.
Ah, but would Directv want to keep it on? Actually may be this is a backdoor effect to get all the Sat. services together. Sirius and XM merged then Charlie buys Sirius XM linking Dish to Sirius XM and then Directv moves in and buys them both :lol: !rolling only kidding, but I couldn't resist the plug for Directv :D

Richard King

02-11-09, 07:07 PM

!rolling Mr. King you are so funny and smart also :sunsmile:
If I were so smart I never would have bought both Sirius and XM stock ages ago. :(

Dolly

02-11-09, 07:58 PM

If I were so smart I never would have bought both Sirius and XM stock ages ago. :(
And oh my gosh I post what I thought at the time was a funny post about Directv getting in on the act then I go to Google news and find out it is true :eek2: Now if I were always this accurate about things Mr. King I could have advised you not to have gotten Sirius and XM stock. I can't believe this it has become like a soap opera right before our eyes :lol: But I must confuss I did post a serious post saying if I were D* I would keep my eye on Charlie so I guess they are ;)

pez2002

02-11-09, 08:06 PM

http://dealbook.blogs.nytimes.com/2009/02/11/sirius-xm-holds-talks-with-liberty-media/?ref=business

anubys

02-12-09, 01:05 PM

the part I don't understand is why they are saying that Liberty lending Sirius the money (and getting some shares in return) is bad for the stockholders...if the company does not go into bankruptcy, how is that bad for shareholders?

I'm not trying to get into a stock price discussion (please don't take it there)...it's just that everybody is making this claim (so I assume it's true) but never explain why...can someone explain the "why" to me?

Dolly

02-12-09, 03:36 PM

the part I don't understand is why they are saying that Liberty lending Sirius the money (and getting some shares in return) is bad for the stockholders...if the company does not go into bankruptcy, how is that bad for shareholders?

I'm not trying to get into a stock price discussion (please don't take it there)...it's just that everybody is making this claim (so I assume it's true) but never explain why...can someone explain the "why" to me?
I don't understand that myself. But I know someone that can and that is Mr. King this Forum's Moderator. He is a shareholder himself unless he sold out after he commented in this Forum that he has stock in Sirius XM. But whether he still has the stock or not he could certainly answer your question.

Richard King

02-12-09, 10:26 PM

Dolly

02-13-09, 12:42 AM

Sirius would have to issue new shares to Liberty (probably BILLIONS of new shares). This reduces the % ownership stake (dilutes) that the current shareholders have in the company. It might be preferable to bankruptcy, but not by much.
Gee I should have been able to have figured that out :bang Mr. King, as always, I'm glad you are around :sunsmile:

anubys

02-13-09, 05:20 AM

Sirius would have to issue new shares to Liberty (probably BILLIONS of new shares). This reduces the % ownership stake (dilutes) that the current shareholders have in the company. It might be preferable to bankruptcy, but not by much.

ok...I thought there was something else that I was missing...IF that is the only reason, then it's total crap...

as a shareholder, if my choice is between bankruptcy (which means the value of my investment is ZERO, with no hope of going up) and diluting my investment to half of the current value (but with the hope that the stock goes up as the company turns things around), then I don't see how Liberty saving the day is "just as bad" as bankruptcy...

I kept thinking that they must mean something else...shareholders already approved issuing billions of shares to stave off bankruptcy...so it's not like that was a secret...

Richard King

02-13-09, 11:03 AM

as a shareholder, if my choice is between bankruptcy (which means the value of my investment is ZERO, with no hope of going up) and diluting my investment to half of the current value (but with the hope that the stock goes up as the company turns things around), then I don't see how Liberty saving the day is "just as bad" as bankruptcy...
I don't think anyone, including me, is saying that a Liberty take over is just as bad as bankruptcy. However, even with a Liberty (or Echostar) takeover, I suspect that current shareholders (including myself) will be SO diluted that the chance of ever seeing their investment turn into anything of value in the future is slim at best. The most likely outcome in my opinion is that current shareholders will be issued 5-10 cents worth of Liberty stock for each SiriusXM share that they hold. Those who don't have enough to make it to a full 100 shares would probably be paid off in cash. At today's value if you have 1000 shares you would get $99 (wow, it's back to 9.9 cents per share). So, for each 1000 shares you might end up being able to celebrate with a cheap night on the town.

anubys

02-13-09, 11:11 AM

it's clear that Mel is using bankruptcy as a hammer...he just got one of the debt holders to move the due date by 6 months (by making the bond secure)...I'm holding out hope!

I'm a long term sirius investor as well...by buying enough shares at 25 and then 10 cents, I brought my average cost down to a point where I just need the stock to get to $1 to get my money back...I've pulled out the goalie and now can only sit and helplessly watch :eek2:

Greg Bimson

02-13-09, 11:41 AM

the part I don't understand is why they are saying that Liberty lending Sirius the money (and getting some shares in return) is bad for the stockholders...if the company does not go into bankruptcy, how is that bad for shareholders?The most simple reasoning, courtesy of the SEC (http://sec.gov/investor/pubs/bankrupt.htm):The investors who take the least risk are paid first. For example, secured creditors take less risk because the credit that they extend is usually backed by collateral, such as a mortgage or other assets of the company. They know they will get paid first if the company declares bankruptcy.

Bondholders have a greater potential for recovering their losses than stockholders, because bonds represent the debt of the company and the company has agreed to pay bondholders interest and to return their principal. Stockholders own the company, and take greater risk. They could make more money if the company does well, but they could lose money if the company does poorly. The owners are last in line to be repaid if the company fails. Bankruptcy laws determine the order of payment.So of course, Mr. Ergen was able to give the bondholders a premium for their bonds, and can now dictate the terms to Sirius XM for repayment of those bonds by 17 February.

If Mr. Ergen or one of his companies owns $180 million of those bonds as reported, then he should be able to get his $180 million by 17 February. It would not matter if Sirius XM has the cash or not.

Sirius XM's only real options are to either pay that $180 million, or not pay it and go for bankruptcy.

Any alliance or cash infusion by DirecTV would be in exchange for billions of shares of Sirius XM, thus forcing control to be lost by Mel Karmazin and a mass dilution of shares. And this is simply to pay for about a $300 million note coming due next week. Sirius XM has another $800 million over the next year coming due.

Sirius XM is going to have a hard time standing alone after all of this is said and done.